Will I Have To Pay Road Tax For My EV?

Will I have to pay Road Tax for my EV?

For decades, road tax, or Vehicle Excise Duty (VED), has been an inescapable expense for drivers. Even if your vehicle rested in a garage or on a driveway, the tax was unavoidable. However, a significant shift occurred in 2001 when the system transformed, basing tax rates on a car's carbon dioxide (CO2) emissions.

As of now, the tax ranges from £0 for cars emitting up to 100g/km of CO2 to £695 for those emitting over 255g/km. If your car was registered between March 1, 2001, and March 31, 2017, a diesel car might share the same tax exemption as an electric vehicle.

The good news for EV owners is that they are currently exempt from road tax. However, this will change in 2025. Until then, EV owners can enjoy the benefit of receiving something for nothing.

While EV’s are exempt from road tax, they are not entirely free from taxes. Although no payments are required, EV owners must still go through the taxation procedure online and renew it every 12 or six months.

A road tax surcharge of £390 applies to cars with a list price exceeding £40,000, added annually from the second to the sixth year of registration. This is on top of the fixed fee of £180 for petrol and diesel vehicles and £170 for alternative fuels.

In April 2017, the government introduced the Expensive Car Supplement, imposing an additional rate of £310 annually for five years on electric cars with a list price over £40,000, even though they were road tax-exempt.

In a move welcomed by EV owners, the Chancellor eliminated the Expensive Car Supplement for zero-emission vehicles in April 2020.

The government plans to "equalise the Vehicle Excise Duty (VED) treatment of all zero-emission and internal combustion engine (ICE) vehicles" starting in April 2025. This will cover both newly manufactured and already-owned alternatively fuelled automobiles, such as electric vehicles.

For EV’s registered on or after April 1, 2017, the days of free road tax will end. They will be subject to the lowest first-year rate of VED, translating to a £10 payment in the first year and an annual normal rate of £180 from the second year onwards.

The landscape for road tax for EV’s is evolving and the exemption era has perhaps ended. Whether this will be replaced with other incentives to encourage the take-up of EV's remains to be seen.