New UK car tax rules needed with 'traditional' vehicles set to pay more VED

Experts have called for petrol and diesel drivers to pay MORE in Vehicle Excise Duty (VED) to create a fairer system. AA campaigners want electric vehicle drivers to pay less than "traditional" cars from 2025 - with EV owners set to pay VED for the first time from April 2025.

Under the planned rules, EV owners will effectively pay the same as low-polluting petrol and diesel cars with only the free Band A set to be scrapped. From the second year onwards, vehicles will pay the standard £190 rate in line with traditional combustion vehicles.

But the AA said: “Rates should only increase in line with inflation and whilst we accept introduction of VED for EVs after 2025, we believe the EV rates should remain lower than for Internal Combustion Engine (ICE) vehicles to act as an incentive.”

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Matthew Walters, Head of Consultancy and Customer Value at ALD Automotive | LeasePlan, has previously claimed introducing fees for EVs was “counterproductive”. He added: “This blanket approach to raising VED creates some unexpected penalties for EV drivers compared to their petrol and diesel counterparts.”

Jakob Pfaudler, Chief Executive Officer at the AA, said: “Household finances remain severely squeezed and the impact of the pandemic is still affecting how people live, work and travel. Those changes and pressures have been felt acutely by drivers.

"From the way they power and pay for their cars, to where and how they use them, the cost and complexity of driving has increased.” Those with costly EVs priced over £40,000 will be eligible to pay an extra £400 per year because of the Expensive Car Supplement, according to the new rules.

It comes amid the ongoing net-zero push from the government, with a petrol and diesel car ban delayed to the mid-2030s by Prime Minister Rishi Sunak previously.