► EV road tax no longer free from April 1, 2025
► Also, EVs valued at £40k or above will pay Luxury Car Tax
► However, EVs still beneficial
Electric cars come with a number of savings incentives.
Unfortunately, as of April 1, 2025, free road tax is no longer one of them.
Yep, as drivers of petrol and diesel cars have been doing for years, drivers of electric vehicles will now have to pay tax.
Why the Change?
Money.
As more drivers make the switch to electric vehicles, the government receives less and less money in tax payments, with the Treasury estimating that keeping EV tax at £0 would cost in the region of £35 billion per year. The tax change is their effort to recoup some of that.
Either way, free EV road tax isn't something that could have went on forever, especially in light of the 2035 ban on the sale of new petrol and diesel vehicles. So the change aims to make the system "fair" for all motorists.
Like most other tax, the money will be spent on a various number of infrastructural and national needs, including maintaining the roads themselves.
What is Road Tax?
Road tax, or Vehicle Excise Duty (VED), is an annual tax applied to the vast majority of vehicles used on the UK's public roads. Typically, the amount that's paid is determined by a vehicle's overall value and the level of CO2 emissions it emits. It's a legal requirement and the money that's raised goes towards all sorts of public services across the UK such as the police, fire and rescue services, education and healthcare. So yeah, pretty important . . .
Technically, hybrids and EVs have always needed road tax. You've just never had to pay for it.
What If I Was Exempt Before?
If you were exempt from road tax altogether due to medical or other reasons, then this should continue to be the case. That is, unless the government says otherwise nearer to April 2025.
Exemptions are for the following vehicles:
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Vehicles produced prior to 1 January 1983 ('classic cars')
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Powered wheelchairs and mobility vehicles
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Vehicles used by drivers with a disability
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Mowing machines
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Steam vehicles
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Vehicles used in agriculture, horticulture and forestry
You can find the full official list via the government website.
What About Hybrids?
From April 1, 2025, drivers of hybrid vehicles will have to pay as well, but don't suffer as much as EVs.
The £10 annual discount for hybrid cars and alternative-fuel vehicles will be removed, and your rate of pay will depend on what date your vehicle was first registered:
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If registered before 1 April 2017, the rate you pay will depend on the vehicle’s CO2 emissions (check the current rates)
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If registered on or after 1 April 2017, you will pay the standard rate (which is currently £190 for 2024 but is subject to change for 2025)
Will I Still Need to Pay Tax When Leasing?
Unfortunately, yes.
When you lease an electric car, you'll still have to pay Vehicle Excise Duty, but the good thing is that you won't have to apply for it as the cost of the tax will be factored into the monthly payments.
So a little less work for you to do.
Why Electric Vehicles Still Make Financial Sense
You may now have to pay tax on them, but EVs are still the way to go to make good savings.
Yes, electric cars might cost a bit more upfront than petrol and diesel vehicles, but you'll be making fuel savings, especially if you charge from home, which can cost as little as 7p per kWh during off-peak hours, and it just gets added to your electricity bill.
And because electric cars have fewer moving parts, there's less that can go wrong with them mechanically, meaning you'll probably be making some maintenance savings somewhere down the line.
Summary
In conclusion, yes, you have to pay tax on electric vehicles. At least from April 1, 2025.
Not the end of the world though, as there's still plenty of benefits to be had with EVs.
FAQs
Do electric cars need an MOT?
Yes. Electric cars follow the standard MOT rules.
Who is exempt from road tax?
Drivers with certain disabilities are exempt from road tax, along with tractors, steam vehicles, mowing machines and more.
What is pavement tax for electric cars?
Pavement tax is applied to electric vehicle drivers who are forced to use public chargers due to having no driveway. They pay four times the rate of VAT than they would if they were able to charge at home.