Road Tax for EV Users will be introduced to the UK in April 2025
In a significant policy shift, the UK government has announced that electric vehicles (EVs) will no longer be exempt from Vehicle Excise Duty (VED), commonly known as road tax, starting from April 2025. This move aims to create a fairer tax system as the adoption of electric vehicles continues to rise.
Why is road tax for EV users being introduced?
The decision to introduce road tax for electric vehicles stems from the need to ensure all drivers contribute fairly to the maintenance of the UK’s road infrastructure.
As electric vehicles become more prevalent, the government anticipates a substantial loss in revenue from traditional fuel taxes. By 2025, it is estimated that half of all new vehicles sold will be electric.
This policy change is designed to address the financial gap and support the ongoing development and maintenance of road networks.
How will road tax for EV users work?
From April 2025, all electric cars, vans, and motorcycles will be subject to VED. The specifics of the tax rates are as follows:
- EVs registered on or after April 1, 2025, will pay a first-year rate of £10, followed by the standard annual rate from the second year onwards.
- EVs registered between March 1, 2001, and March 31, 2025, will transition to the first band where a rate becomes payable, which is currently £20.
- New electric vehicles with a list price exceeding £40,000 will be subject to an additional rate from the second year of registration.
How will this impact EV users?
This policy change will affect both current and future owners of electric vehicles.
While the introduction of VED may seem like a setback for EV owners, the government continues to support the transition to electric vehicles through various incentives.
These include favourable first-year VED rates for low-emission cars, Company Car Tax benefits, and grants for EV chargepoint installations.
The introduction of road tax for electric vehicles is part of a broader strategy to balance fairness in the tax system while promoting sustainable transportation. The government remains committed to its net-zero objectives and continues to encourage the adoption of electric vehicles through other supportive measures. This includes the ban on the sale of new petrol and diesel cars and vans from 2030.
