Electric car owners dodge VED tax rises, but more motorists will have to pay from 2025
Whilst most motorists face a rise in the cost of road tax as Vehicle Excise Duty rates increase, electric car owners still do not have to pay.
As car tax rates are set to increase for millions of motorists in the UK, owners of electric vehicles will still not have to pay until 2025.
In November 2023, the Treasury announced that Vehicle Excise Duty (VED) rates will increase in April 2024 to stay in line with the current inflation rate.
Whilst this means that motorists keep their contributions to public finances, such as road repairs, consistent, it has highlighted a large disparity between some drivers.
Most drivers of cars first registered after April 1, 2017 will have to pay £180 per year to tax their car, with models retailing for more than £40,000 charged £390 extra.
However, owners of electric vehicles and some plug-in hybrid models currently receive their road tax for free.
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Introduced as part of the government’s incentives to encourage more drivers to switch from a petrol or diesel to an electric car, owners of EVs do not need to pay for annual road tax.
Instead, to avoid being fined, drivers need to go onto the DVLA website and register their vehicle as taxed every year.
Motorists can also receive a road tax exemption if they own a classic car or commercial vehicle that was first registered more than 40 years ago.
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Nevertheless, whilst electric car drivers are currently able to save hundreds on their running costs, time is running out.
In November 2022, Chancellor of the Exchequer Jeremy Hunt announced that electric vehicles will become liable for road tax from April 2025.
The Chancellor noted that the growing number of electric vehicles could cause a £35billion loss to the government if a form of road tax is not introduced for these cars.