The RAC has warned owners of a growing type of vehicle that they are set to see a significant tax rise in the next 12 months, with some experiencing a rise of £600.
As more electric vehicles enter the UK roads, many of the incentives surrounding them are being cut, including the exemption on Vehicle Excise Duty (VED), better known as road tax.
In a blog post, the RAC highlighted that electric car owners will need to pay road tax from April 2025, which will be based on two factors.
They explained: “The new 2025 VED rules will impact hundreds of thousands of EV owners and their electric vehicle running costs. As well as paying for road tax for the first time, there will also be an expensive car tax supplement for electric cars with a list price that exceeds £40,000.
“Many of the road tax changes will be backdated, which means drivers who have never paid for VED before will be required to do so after 1 April 2025.”
Since the current system for taxing a vehicle is based on either the size of the engine or the amount of carbon dioxide it produces, electric vehicles fall into the lowest possible tax band that covers models making less than 50g/km.
As a result, road tax for the vehicle’s first year on the UK roads will be £10. However, electric car owners will need to move to the standard rate of tax from the second year, which is £190.
Some motoring experts have called on the Government to lower the figure as an incentive for more to buy plug-in models over petrol or diesel alternatives.
In addition to VED, the RAC also highlighted that many of the most popular electric models will also qualify for the Expensive Car Supplement, sometimes called the luxury car tax.
They added: “The Expensive Car Supplement exemption for electric vehicles is due to end in 2025. New zero emission cars registered on or after 1 April 2025 will therefore be liable for the Expensive Car Supplement.
“The Expensive Car Supplement currently applies to cars with a list price exceeding £40,000 for five years and is currently £410 a year. This means EV drivers with an ‘expensive car’ will pay up to £600 a year for road tax.”
Currently enforced on petrol, diesel, and hybrid models, the Expensive Car Supplement taxes the owners of vehicles with a list price of over £40,000.
The tax needs to be paid on top of VED for the first five years in which the vehicle is on the road, meaning that some electric car owners will need to pay a total of £600 per year.
Whilst many car manufacturers are introducing affordable electric models to the market, with prices starting from around £15,000, around two thirds of EVs are currently priced at over £40,000.
