Electric vehicle (EV) owners could potentially save a whopping £273 million in car tax if they act before the changes to road tax come into effect on April 1, 2025. Sam Sheehan, motoring editor at online car sales platform cinch, has outlined how EV drivers could pocket a saving of £195 if they take swift action.
Sam explained: “Electric car drivers have long enjoyed free road tax, but that’s set to change from April 1, 2025, when electric cars registered between April 1, 2017, and March 31, 2025, will pay the same standard £195 road tax rate as petrol, diesel and hybrid cars.
“However, savvy EV drivers can get another year of free road tax if they renew by March 31, 2025. With as many as 1.4 million electric cars on UK roads, that’s a potential saving of £273 million from the new EV road tax cost. All they need to do is renew their road tax on the government’s website before March 31, 2025, by putting in their car’s number plate and the 12-digit reference number on their V5C (log book).
“The form will ask if they’re sure because, normally, renewing early changes the renewal date and means paying twice for road tax until the original renewal date. But since EV road tax is currently free, this doesn’t matter.
“Those that buy new EVs won’t be so lucky, since electric cars registered after April 1, 2025, will be subject to the standard road tax rate and the expensive car supplement if they cost £40,000, from their second year on the road. The first-year tax rate for new EVs is only £10 at least – although this used to be free, too.”
Full details of what’s changing in 2025 for EV road tax
From April 1, 2025, the landscape will change dramatically for electric vehicle owners. For the first time, they will have to pay Vehicle Excise Duty (VED), which will significantly increase the cost of owning an electric vehicle.
Moreover, a new Expensive Car Supplement will mean that those who purchase electric vehicles costing over £40,000 could end up paying as much as £620 per year in tax. For electric, zero or low emissions vehicles registered on or after April 1, 2025, drivers will have to pay the lowest first-rate of tax – £10.
However, from the second tax payment onwards, this will rise to the standard rate of £195 annually. Electric, zero or low-emission cars registered between April 1, 2017, and March 31, 2025, will now be subject to the standard rate of £195.
In contrast, EVs registered between March 1, 2001 and March 31, 2017, will move to the first band that has a VED value, resulting in a tax payment of £20. Until now, electric vehicles have been exempt from the Expensive Car Supplement, but this changes from April 1 with cars registered on or after this date now liable for the additional cost.
Drivers of electric vehicles (EVs) costing over £40,000 will be required to pay a standard rate plus an additional supplement for the first five years from the start of the second payment. This means that owners of an EV over £40,000 will end up paying £620 per year in road tax.
The question is: Will electric vehicles still prove cheaper to run than petrol and diesel cars?
Despite these tax changes potentially affecting the overall cost-effectiveness of operating an electric vehicle, they should still remain relatively economical to run in many respects. A lot depends on whether an owner can use home charging facilities, as this allows them to benefit from extremely low electricity rates provided by EV-friendly tariffs.
For a typical EV, this could mean a full charge providing around 200 miles of range for just £5. However, the story changes if one is dependent on public charging, where costs are significantly higher.
Electric vehicles also require less maintenance than their petrol or diesel counterparts, due to having fewer moving parts. Nevertheless, it’s essential that EVs are regularly checked to ensure key components are working correctly and consumables such as tyres, wipers and brake pads will still need replacing.
