EV drivers face car tax hike up to £600 as new rules come into force
Car tax is coming in for electric vehicle drivers for the first time from April 2025.
The Vehicle Excise Duty (VED) will cost EV owners £190 a year, putting them on par with petrol and diesel drivers.
A second tax will also be enforced for EV drivers who own expensive cars, as they will eligible for the so-called ‘luxury car tax’.
Owners of cars valued over £40,000 are forced to pay an extra £410 for five years after a car is first registered.
They already have to spend more on the cost of car insurance as electric cars have more expensive parts.
Free road tax was an “incentive” for drivers to go green, critic Glen Sanderson, the leader of Conservative-led Northumberland County Council, told the Daily Express.
He added: “This is a slap in the face for climate change, and for all those who bought electric cars.”
Expensive Car Supplement
The luxury car tax, or Expensive Car Supplement as it is officially called, was introduced by the DVLA in 2017 to ensure a "fairer tax contribution".
But with EVs now being eligible for VED, it could see many owners having to stump up an additional £410 every year because they are generally expensive to buy.
NimbleFins research found the average cost to buy an electric car in the UK is around £48,000.
While the research identified some electric vehicle models that cost below £40,000, a Tesla costs upwards of £70,000.
The Expensive Car Supplement will not apply to EVs registered before April 1 2025, the DVLA says.
The tax is applied to the list price of the vehicle, even if you bought it with a promotion. So for example, a car listed for £42,000 but being promoted with a 10% discount would still be eligible for the luxury car tax.
It also applies to car add-ons. So if a car was listed as £38,000 and you bought upgrades worth £3,000, that vehicle would also be liable for the luxury car tax, Auto Express reports.
The VED is subject to change next year, with the £190 charge potentially rising.
A Treasury spokesperson said: “We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”
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