Hundreds of thousands of drivers 'unaware' of huge change for some cars from April
Plans to remove the road tax incentive for EV owners were first announced in the Autumn Budget back in 2022, when it was predicted that over half of all new vehicles would be electric by 2025.
630,000 drivers are "unaware" over a huge change for some cars costing £620 extra tax from April. Plans to remove the road tax incentive for EV owners were first announced in the Autumn Budget back in 2022, when it was predicted that over half of all new vehicles would be electric by 2025.
While we know that EVs make up closer to 20% of all new car sales today, the deadline for removing the exemption has remained the same. Motorists were told by Motorpoint: "At a simple level, as more car owners make the move to electric, the current exemption means that fewer motorists are paying vehicle excise duty (also known as road tax).
"So, there’s less tax being collected from motorists. The government is also losing out on fuel duty as EVs don’t require petrol or diesel, which has tax baked into the price at the pump. The government has predicted that the loss of these two major sources of motor taxation could result in a ‘£35 billion black hole in finances’ – making the current system unsustainable."
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If an EV was first registered before 31 March 2017, motorists will be expected to pay £20 per year. If it was registered between 1 April 2017 and 31 March, 2025, it will be £195 per year from the start of this April.
Anyone planning to buy a new EV after 1 April 2025 will pay £10 in the first year and then £195 – or more – in every subsequent year.
Responding to the changes, one driver said: "The cost of electricity, lack of charging facilities away from home and the high price of electric cars make them unrealistic. Plus, the batteries don't last very long."
A second said: "I think it's a bad idea switching to electric. They're not suitable for cold countries or places like the north of Scotland." A third typed: "It's virtually impossible for many disabled people to cope with hauling charging cables between chargers and cars."
Vehicle finance expert Jonathan Such said: "Until now, one of the biggest benefits of owning an electric vehicle has been the financial incentives, particularly VED exemption. However, from April 2025, EV drivers will be required to pay car tax just like petrol and diesel drivers, which is typically around £195 per year.
"However, if you renew your vehicle tax before April 2025, you could extend your exemption for another year, meaning you won't have to pay until March 2026. You can re-tax your vehicle at any time through the government website using your registration number and the reference on your V5C logbook.
"The upcoming EV tax changes could take many drivers by surprise, as our survey shows that nearly half of Brits are completely unaware of them. While EVs offer long-term savings on fuel and maintenance, the high upfront cost remains a significant barrier. It's also clear that charging infrastructure and concerns around battery life are still making some motorists hesitant about making the switch.
"For those considering an EV, it's important to research all the financial aspects, including tax changes, running costs and available grants, before making a decision."