From April 2025, electric cars, vans and motorcycles will begin to pay Vehicle Excise Duty in the same way as petrol and diesel vehicles.
The government says this will ensure all motorists pay a fair tax contribution, but those owning electric vehicles are unlikely to see it as fair.
While the new tax system for electric vehicles quashed unpopular rumours about pay per mile taxation, it means there is no tax benefit to owning an electric vehicle over a petrol or diesel one.
EV owners will be required to pay the standard rate of road tax VED, which is currently £165 per year, and additionally, those with a car with a list price of £40,000 or more will also pay the £355 premium car tax rate.
According to the government, this will ensure that all road users begin to pay a fair tax contribution as the take up of electric vehicles continues to accelerate.
It’s fair to say that the EV industry hasn’t taken kindly to the news, with manufacturers labelling the rules ‘short-sighted’. “We are still many years from the ‘tipping point’ when electric vehicles will reach cost parity with petrol and diesel vehicles,” said Tim Slatter, the UK chairman of Ford. “Until then, we should be incentivising customers to make the greener choice.
The government’s stance is that come push or shove, the UK is transitioning to electric vehicles with sales of petrol and diesel cars banned from 2030, so scraping up VED between 2025 and 2030 won’t slow down the transition.
Unfortunately, it leaves a sour taste for electric vehicle owners, but it just goes to show that nothing in life is free.