Electric cars to be subject to vehicle tax from 2025

The chancellor’s recent Autumn Statement announced that electric cars, vans and motorcycles will pay road taxes from April 2025. At present, they do not do so, a move designed to encourage uptake.

The RAC says it is “probably fair” that owners of electric vehicles start paying road tax. The motoring organisation has also moved to alleviate fears the new taxation could curb consumer enthusiasm.

Nicholas Lyes, RAC head of policy, said: “After many years of paying no car tax at all, it’s probably fair the Government gets owners of electric vehicles to start contributing to the upkeep of major roads from 2025.

“While vehicle excise duty rates are unlikely to be a defining reason for vehicle choice, we believe a first year zero-VED rate benefit should have been retained as a partial incentive.

“But we don’t expect this tax change to have much of an effect on dampening the demand for electric vehicles given the many other cost benefits of running one. The fact that company car tax increases on EVs will be kept low should also keep giving fleets the confidence to go electric which is vital for increasing the overall number of EVs on our roads.”

DfT figures show 327,000 plug-in vehicles (PiVs) were registered in the UK for the first time in 2021, a year-on-year rise of 77%.