As the UK works towards achieving its ambitious goal of net-zero carbon emissions by 2050, the transition to electric vehicles has been a crucial part of the plan. With the government aiming to ban the sale of new petrol and diesel cars by 2035, the shift towards electric cars has accelerated in recent years. However, a new development is set to impact EV owners starting in April 2025: the introduction of road tax for electric vehicles. This change has raised eyebrows among current and prospective EV owners, so let’s break down what this new road tax means, why it’s happening and how it will affect you.
Why Is the UK Introducing Electric Car Road Tax?
The UK government has long incentivised the adoption of electric vehicles, offering a range of benefits including tax breaks, grants and exemptions from certain charges. However, as the number of EVs on the road grows, there’s a growing concern over the loss of revenue from traditional fuel taxes. Road maintenance and infrastructure improvements are largely funded by fuel taxes, which EVs don’t contribute to because they don’t require petrol or diesel.
At the same time, the government needs to ensure that all drivers, including those with EVs, are contributing fairly to the upkeep of the road network. With more electric cars arriving in the dealerships every year, the UK government has decided that it’s time to introduce a system where electric vehicle owners will contribute to road tax, just like petrol and diesel car owners have for decades. This means money from the taxes can go towards maintenance of roads and infrastructure.
What Exactly Is the New Electric Car Road Tax?
Currently, all ICE vehicles must pay road tax as a legal requirement. Even if you pay £0, you still need to ensure that your car is taxed. Starting on 1st April 2025, the UK will implement a new road tax for all electric vehicles. The general structure of the tax is as follows:
How Much Will the Tax Cost?
There are going to be a number of tax changes, which are as follows:
- Any new zero-emission cars that have been registered on or after 1st April 2025 will pay the lowest tax rate of £10 for the first year. This applies to cars that produce less than 50g/km.
- Once you hit the second tax year, you will then be required to pay the standard rate of tax, which is £195 a year after 1st April 2025.
- If your car was registered from the 1st April 2017 to 31st March 2025, you will immediately pay the standard tax rate.
- The Expensive Car Supplement is a specific tax bracket where cars that are priced over £40,000 need to pay £410 in tax. Electric cars were exempt from this, but that is to be no more - electric vehicles which exceed this limit will need to pay tax as well. The rate for ICE cars will increase to £425 as of 1st April, so expensive EV owners will need to pay £620.
- If your zero or low emission vehicle was registered between 1st March 2001 and 30th March 2017, you will move from Band A to Band B, which means you will pay £20 per year.
- If you own a van that produces zero emissions, your vehicle will fall under the rate for petrol and diesel light goods vans, which is £335 per year.
- If you own a motorcycle or tricycle that produces zero emissions, you will pay £25 for the smallest engine size.
Will the New Tax Discourage EV Purchases?
One concern that many prospective EV buyers have is whether this new tax will discourage them from making the switch to electric. It’s important to put this change into perspective. While the introduction of the road tax will add an annual cost for EV owners, this cost is still low compared to the fuel expenses associated with petrol or diesel cars. Furthermore, the overall cost of ownership for an electric vehicle is still much lower, due to savings on fuel and maintenance.
Additionally, the UK government has made it clear that the introduction of the road tax is part of a broader strategy to encourage sustainable transportation. As such, EV owners will still be eligible for various incentives and exemptions, including the £2,500 plug-in car grant (available for certain models), tax breaks and free or reduced charges for charging at home and public EV charging stations. In many cases, the savings on fuel and reduced maintenance costs for EVs will more than offset the additional road tax.
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The introduction of an electric car road tax in the UK starting in April 2025 marks a significant shift in the country’s transportation policies. While the tax may initially raise concerns among potential buyers and current owners, it is a necessary step to ensure that EVs contribute fairly to road maintenance and infrastructure. With the UK government’s commitment to a greener future, this change is part of a broader strategy to make the transition to electric vehicles more sustainable in the long run.
While the new tax will add a modest annual fee for electric vehicle owners, the overall savings from reduced fuel and maintenance costs will still make EVs an appealing choice for many consumers. The UK is undoubtedly taking significant steps toward a greener, more sustainable future, and this new tax is just one part of that journey. Browse through our electric vehicles today to find the perfect car to suit your needs. If you’re still concerned about the switch to electric, take a look at our EV guides on YouTube to understand more about the myths and facts of EV ownership. If you’re unsure what you're looking for or would like more information about one of the vehicles you see on our website, don’t hesitate to get in touch with one of our team and we’d be happy to help you.