10 hours Ago By Luke Chillingsworth
New Vehicle Excise Duty (VED) car tax updates will “level the playing field” for petrol and diesel owners, according to experts. The move ensures electric car owners are no longer prioritised with vehicles offered discounts and exemptions up until now. However, many EVs will no longer enjoy the benefits of cheaper rates with zero-emission models set to pay the same standard rates as combustion owners.
For vehicles built after 2017, the VED charges from April 2025 will stand at £195 per annum in a blow to cash-strapped road users. Motoring specialists at Cars2Buy said it was clear motorists would see a "noticeable adjustment” in how much road users will have to pay to use the roads. They said: “These changes aim to level the playing field as the government shifts focus towards generating revenue from all types of vehicles, including electric ones.
“For those of us cruising the UK’s motorways or pottering through local towns, the cost of keeping a car on the road is about to see a noticeable adjustment.” However, electric car owners will still enjoy some benefits with considerably lower first-year VED rates still available. The most polluting petrol and diesel models face the prospect of staggering hikes with first-year fees doubling.
Models producing over 255g/km of CO2 face a whopping £2.745 rise with total cots in year one jumping to £5,490 per annum. Meanwhile, electric car owners will enjoy a £10 first-year rate before jumping to the standard £195 fee from year two.
There are fears the new costs could impact on demand for electric vehicles with no incentives in place to encourage motorists to switch. However, HM Revenue and Customs have suggested the tax system will still "support the transition to electric vehicles” with favourable first-year VED rates a major part of the plan. HMRC warned bringing EV tax fees into line with petrol and diesel models was a move to ensure motorists paid a “fairer tax contrition”.
They explained: “To ensure all drivers begin to pay a fairer tax contribution, this measure will bring electric vehicles, which do not currently pay VED, and AFVs and hybrids, which pay a discounted rate, into the motoring tax system, in the same way as petrol and diesel vehicles.”.
