EV Road Tax Changes

Currently all-electric vehicles and some hybrids come with the benefit of not paying any road tax, this scheme was to encourage road users to adopt a zero emissions greener lifestyle.

Until now, 100% battery electric cars and some hybrids have been treated to free road tax – officially known as Vehicle Excise Duty – to help lower costs and encourage adoption. However, at the end of last year The Government announced that electric car owners will be required to pay road tax from 2025, this change was announced as part of the Government’s autumn statement.

What does this mean for EV users?

From 1 April 2025, all EV owners will be required by law to pay the standard rate of road tax VED (vehicle exercise duty), which currently stands at £165 per year. However if you purchase an electric vehicle with a list price of £40,000 or more you will qualify to pay a premium level of car tax.

Does this affect EV owners that have owned their vehicle before 2025?

Yes, the new EV road tax rate will apply to all cars first registered on 1 April 2017, which means that this new tax law will backdate to millions of used EVs in the UK. Now is the time to switch to electric to take advantage of the free road tax until 2025.

Will this affect Benefit In Kind (BIK) Tax?

Benefit In Kind (BIK) is a tax for employees who gain benefits or perks on top of their monthly wage. If you are offered a company car which involves private usage, you will need to pay a BIK contribution, or company car tax. BIK is currently at just 2% for all zero-emissions until 2025 and is also set to rise. But there is good news, if you currently have an electric vehicle on order, BIK will rise by a maximum of just 1% between 2025 and 2028. So the huge savings in monthly tax for EVs are still present and with this incentive there has never been a better time to take the electrifying steps to reducing your carbon footprint.

Environmental Incentives to go all-electric

1. Efficiency

EVs are considered to be more efficient and use less energy to undertake the same tasks as cars using fossil fuels. When it’s time to ‘refuel’, battery power requires you to simply plug and go at your nearest charging point.

2. Zero Pollution

Did you know that in 2022 20% of all global greenhouse gas emissions came from transportation in the UK? When you drive a fossil fueled vehicle, harmful emissions are released into the atmosphere. A combination of both carbon dioxide and greenhouse gases, which come from your exhaust, are responsible for climate change and have a lasting, damaging effect on the environment. Although electric cars require electricity in order to power them, their carbon output is significantly lower than those using petrol or diesel. Preventing air pollution will make a huge difference in protecting our planet and our own health.

3. Positively Peaceful

Have you ever driven an all-electric vehicle? Your first time will always have you questioning, is the engine on, if I press the accelerator will I even move? Not only do they reduce air pollution but they also reduce the noise pollution! The kids can sleep peacefully in the back of the car and you can take a moment to enjoy the scenery as you glide smoothly across the roads.

If you think it’s your time to switch to a more sustainable lifestyle, check out our all-electric and hybrid models available. Have a question? Our sales teams are on hand to help, contact us.