Starting from 1 April 2025, registered keepers of electric, zero, or low-emission vehicles in the UK will be required to pay vehicle tax (VED) in the same way as petrol and diesel vehicle owners. This change will apply to both new and existing vehicles, marking a significant shift in the taxation policy for greener vehicles.
What’s Changing?
Under the current VED system, electric and low-emission vehicles fall under Band A, which has a tax rate of £0. However, with the new measure, Band A will be eliminated, and all vehicles will be reassigned to the first band where a tax rate applies.
How Will This Affect Your Vehicle?
The impact of this policy change depends on when the vehicle was first registered:
- Electric, zero, or low-emission cars registered on or after 1 April 2025:
- The first-year rate will be £10.
- From the second year onward, the standard rate will apply, set at £195.
- Electric, zero, or low-emission cars registered between 1 April 2017 and 31 March 2025:
- Owners will pay the standard rate of £195 per year.
- Electric, zero, or low-emission cars registered between 1 March 2001 and 31 March 2017:
- These vehicles will move to the first band where a VED rate is applicable, set at £20 per year.
Changes for Hybrid and Alternatively Fuelled Vehicles (AFVs)
- The £10 annual discount for hybrids and AFVs will be removed.
- If registered before 1 April 2017, the tax rate will depend on CO2 emissions (owners should check the current rate applicable to their vehicle).
- If registered on or after 1 April 2017, owners will pay the standard rate of £195.
Taxation of Electric Vans and Motorcycles
- Electric Vans: Most will move to the standard annual rate applicable to light goods vehicles.
- Electric Motorcycles and Tricycles: These will be taxed at the annual rate applicable to the smallest engine size (owners should check the current rate).
Expensive Car Supplement for New Electric Vehicles
From 1 April 2025, new electric and zero-emission vehicles with a list price exceeding £40,000 will be subject to an additional tax. Owners will need to pay the standard rate plus the expensive car supplement for the first five years, starting from the second tax year.
What Does This Mean for EV Owners?
This policy shift represents a move towards equalizing the tax structure for all vehicles, regardless of fuel type. While it may increase ownership costs for electric vehicle owners, the UK government likely aims to balance tax revenues while continuing its push towards sustainable transportation.
EV owners should stay informed about their specific tax obligations and check their vehicle registration details to determine the exact rate applicable to them.
Leave a Reply