Do electric cars pay road tax in the UK?

The amount of Vehicle Excise Duty (VED) – more commonly referred to as road tax or car tax – payable depends on several factors, including the type of vehicle, its CO2 emissions, and the date of its registration. Historically, road tax was primarily based on the vehicle’s engine size, but since 2001, it has been linked to carbon dioxide emissions. Now, the general rule of thumb is the higher the CO2 emissions emitted from your vehicle, the higher the road tax.

And with the ban on the sale of new petrol and diesel cars in 2035, the government has searched for ways to encourage the adoption of electric cars. In fact, certain incentives for low-emission vehicles, such as lower tax rates or even exemption from road tax altogether, have come about for electric cars and hybrid electric cars.

But do electric cars pay road tax in the UK in 2024?

Keep reading to learn everything you need about electric cars and road tax.

Do electric cars have to pay road tax?

No, battery electric cars do not have to pay road tax since electric cars produce no tailpipe emissions. No road tax on electric cars is one of the many perks of making the switch to electric in 2024, in league with exemptions from areas such as the Ultra Low Emission Zone and the Congestion Charge.

Do hybrid cars pay road tax in the UK?

While plug-in hybrid vehicles (PHEVs) often get lumped in with the likes of battery electric cars, this is not the case with road tax. Unlike fully electric cars that produce zero emissions at the tailpipe, hybrid cars must pay road tax in the UK in 2024 and the foreseeable future because, despite the electric element of plug-in hybrids, PHEVs still produce CO2 emissions.

But there is a silver lining; hybrid cars pay a reduced amount as the emissions are lower than standard ICE (internal combustion engine) vehicles.

But what about if your EV is a premium vehicle – do you have to pay road tax on electric cars over £40,000?

When purchasing a vehicle with a value or ‘list price’ of over £40,000, an additional road tax fee must be paid. Named the expensive car supplement, a government-enforced premium rate of £390 must be paid every year for five years from the second time your vehicle is taxed.

The good news is you don’t have to pay road tax on electric cars over £40,000 nor pay the additional premium vehicle fee for vehicles over £40,000 in 2023/2024 – if you have a fully electric vehicle. The bad news is if you own a hybrid electric vehicle, you will still have to make road tax payments and pay the additional supplement if your hybrid is over this threshold.

Will electric cars have to pay road tax in the future?

With the adoption of EVs surging in the UK (1,145,000 pure electric cars registered to date) and the ban on the sale of petrol and diesel cars in 2035, electric cars on UK roads will soon become the norm.

And unfortunately, the UK government announced in November 2022 that zero-emission cars, vans and motorcycles will have to pay road tax from April 2025, meaning fully electric cars will have to start paying road tax. Electric cars will also have to start paying the expensive car supplement for vehicles over £40,000 in 2025.

There is an upside – battery electric car owners will pay the lowest band for the first year. However, this reduced rate is only for a short period, as EV drivers will be charged the standard annual rate after the initial year.

It’s important to note that even though battery electric vehicles are exempt from paying vehicle excise tax, you still need to register your electric car and tax your vehicle.

Are electric cars exempt from other costs in the UK?

Yes – electric cars are exempt from the Congestion Charge and the Ultra Low Emission Zone (ULEZ), meaning you can further benefit from making the switch in 2024.

Additionally, electric vehicles are often found to be cheaper in multiple areas when compared to ICEs. For example, as EVs have fewer moving parts, less can go wrong, meaning maintenance costs are significantly lower than their petrol/diesel counterparts.

How much is road tax in the UK?

The 2024 tax payment rates for cars registered on or after 1st April 2017 for the first year are:

The current vehicle tax payments for the second year and onwards are:

What about company car tax?

Currently, you don’t have to pay road tax on vehicles that are electric until 2025; however, Benefit-in-Kind tax still has to be paid if you’re using a company EV.

Summary:

• In 2024, battery electric cars do not pay road tax in the UK and are exempt from the expensive car supplement. However, plug-in hybrid electric vehicles are still required to pay Vehicle Excise Duty tax and the additional premium for vehicles over £40,000.
• From April 2025, pure battery electric cars, in addition to other zero-emission vehicles (cars, vans and motorcycles), will no longer be exempt from road tax or the expensive car supplement.

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