Electric car drivers can get free car tax for another year – saving a potential £273 million across the estimated 1.4 million EVs on UK roads – if they take action before the changes to road tax on April 1, 2025. Sam Sheehan, motoring editor at car sales website cinch, has explained how EV drivers could save £195 if they take action soon.
Sam said: “Electric car drivers have long enjoyed free road tax, but that’s set to change from April 1, 2025, when electric cars registered between April 1, 2017, and March 31, 2025, will pay the same standard £195 road tax rate as petrol, diesel and hybrid cars.
“However, savvy EV drivers can get another year of free road tax if they renew by March 31, 2025. With as many as 1.4 million electric cars on UK roads, that’s a potential saving of £273 million from the new EV road tax cost. “All they need to do is renew their road tax on the government’s website before March 31, 2025, by putting in their car’s number plate and the 11-digit reference number on their V5C (log book).
“The form will ask if they’re sure because, normally, renewing early changes the renewal date and means paying twice for road tax until the original renewal date. But since EV road tax is currently free, this doesn’t matter.
“Those that buy new EVs won’t be so lucky, since electric cars registered after April 1, 2025, will be subject to the standard road tax rate and the expensive car supplement if they cost £40,000, from their second year on the road. The first-year tax rate for new EVs is only £10 at least – although this used to be free, too.”
Full details of what’s changing in 2025 for EV road tax
From April 1, 2025, the landscape will shift for electric vehicles. For the first time, electric vehicle drivers will be subject to VED, marking a considerable rise in ownership costs.
Additionally, a new Expensive Car Supplement will see those purchasing electric vehicles priced over £40,000 potentially paying up to £620 annually in tax.
For electric, zero or low emissions vehicles registered on or after April 1, 2025, drivers will be required to pay the lowest first-rate of tax – £10. However, from the second tax payment onwards, this will escalate to the standard rate of £195 annually.
Electric, zero or low-emission cars registered between April 1, 2017 and March 31, 2025, will now be subject to the standard rate of £195. In contrast, EVs registered between March 1, 2001 and March 31, 2017, will transition to the first band that has a VED value, resulting in a tax payment of £20.
Until now, electric vehicles have been exempt from the Expensive Car Supplement, but this changes from April 1 with cars registered on or after this date now liable for the additional cost. What does this mean?
Essentially, drivers of EVs costing over £40,000 will have to pay a standard rate alongside an additional supplement for the first five years from the start of the second payment.
For many, this means owners of an EV over £40,000 will pay £620 per year in road tax. The question remains: Will electric vehicles still prove cheaper to run than petrol and diesel cars?
While these tax alterations may impact the overall cost-effectiveness of operating an electric vehicle, in many respects, they should remain relatively economical to run. Much hinges on whether an owner can utilise home charging facilities, as this allows them to benefit from extremely low electricity rates provided by EV-friendly tariffs.
For a typical EV, this could equate to a full charge yielding around 200 miles of range for a mere £5. The narrative changes if one is reliant on public charging, where costs are significantly steeper.
Electric vehicles also demand less upkeep than their petrol or diesel counterparts, given the fewer moving parts. However, it’s crucial that EVs are regularly inspected to ensure key components are functioning properly and consumables such as tyres, wipers and brake pads will still require replacement.