New car tax rules mean drivers of these cars face £600 rise in VED
Car tax changes launching within months will see drivers pay £600 extra per year to drive. From April 1, 2025, drivers of electric cars will have to pay Vehicle Excise Duty (VED) in the same way as drivers of petrol and diesel vehicles.
As well as that £190 charge, they could face a £410 "luxury" vehicle tax if they have a motor worth £40k or more. For EVs and low emission cars registered on or after April 1, 2025, they will pay the lowest first rate of vehicle tax, while the standard rate will apply from the second year.
This is currently set at £190 for 2024, although costs are subject to change for the new financial year in April 2025. EVs registered between April 1, 2017, and March 31, 2025, will also have to pay the standard rate of £190 from April 2025.
READ MORE NS&I urges customers to fill out crucial document or risk losing Premium Bonds
Drivers of new electric vehicles which have a list price of more than £40,000 will now also need to pay the expensive car supplement from the second tax payment onwards. These vehicles pay an additional £410 every year for five years starting from the first VED car tax payment made when the car is one year old.
From 1 April 2025, drivers of electric and low emission cars, vans and motorcycles will need to pay vehicle tax in the same way as drivers of petrol and diesel vehicles. This change will apply to both new and existing vehicles.
This new measure effectively removes band A under the existing VED system which is currently £0. Vehicles in this band will be required to move to the first band where a rate becomes payable.
Erin Baker, editorial director at Auto Trader, said: "With two-thirds of all electric vehicles having a price point of over £40,000 this will make switching to a zero-emissions vehicle less appealing knowing that road taxes are higher, on top of the initial investment.
"However, for drivers that are looking at making the switch to an electric vehicle over the next few years and are concerned about not only the upfront cost as well as the newly implemented vehicle tax costs, car leasing is a good option to consider."