What is Road Tax?
Road tax (or car tax) is a yearly tax paid by the owners of cars, motorbikes, vans, and other motor vehicles registered in the UK. VED is the official term for road tax or car tax. It stands for Vehicle Excise Duty.
What are Road Tax Payments For?
The money road tax raises is paid directly into the central government fund, which is used for projects that benefit everyone – including road work and maintenance.
How much Road Tax do I Pay on an Electric Vehicle?
Currently owners of electric vehicles don’t have any VED to pay. Zero emission EVs (BEVs) are zero-rated standard tax for both the first year and all subsequent years. However, this will change in April 2025.
How is Road Tax Calculated?
Road tax is calculated in different ways depending on the age of your car:
- The VED of cars registered after March 2001 is based on CO2 tailpipe emissions
- The VED of cars registered before March 2001 is based on engine size
At present, that means battery electric cars are exempt from road tax due to their zero emissions and absence of an engine. From 1st April 2025, these figures will change and the first band at £0 will be dissolved.
What Change is Taking Place Regarding Road Tax for Electric Vehicles?
From 1 April 2025, electric vehicles will be charged road tax.
Why are the Government Going to Charge Road Tax for Electric Vehicles?
Since electric car owners have spent many years paying no road tax at all and the percentage of vehicles on the roads that are electric is going to grow and grow, the government will not be able to sustain the lack of income to maintain roads from such a large percentage of road users.
What Will I Have to Pay in Road Tax?
The amount of road tax depends on when the low emission (hybrid and plug-in hybrid) or zero-emission car’s registered:
- New electric and low emission cars registered on or after 1 April 2025 will pay just £10, rising to the standard VED rate (that all other cars pay), which is currently £190, from year two.
- EVs and low emission cars registered between 1 April 2017 and 31 March 2025 Will pay the full VED rate (currently set at £190) which is subject to change for 2025, but no revision has yet been made.
- Electric and low emission cars registered between 1 March 2001 and 31 March 2017 Will move to the first band that has a VED value (as defined by the Department for Transport) which is currently £20, however this rate is subject to change for 2025, but no revision has been given at the time of writing.
In addition, buyers of EVs costing more than £40,000 when new will be liable for the extra annual fee for years two to six that’s payable for more expensive new cars. This is currently £390 a year, but is also likely to have increased by 2025.
Will I Have to Pay Road Tax for my Older Electric Vehicle?
Yes, used EV owners will have to pay VED for the first time from April 2025, since zero emission cars first registered between 1 April 2017 and 31 March 2025 fall into the standard annual rate, which is currently £190 a year. However, if your electric vehicle is older than this you will only have to pay £20 from April 2025, as things currenty stand.
What About the Road Tax on my Hybrid Car?
Hybrid cars will lose the £10 discount that currently applies to them on first and subsequent year fees, so they will also pay the same as cars with petrol and diesel engines.
What are the Road Tax Categories and Payments for All Vehicles Currently?
The current road tax payments can be found on the government website here.