Electric car drivers can save hundreds of pounds by acting before April tax changes
Electric car drivers can save hundreds of pounds by taking quick action before vehicle tax changes come into effect next year.
EVs have been exempt from vehicle excise duty (VED) — commonly known as car tax — as part of government incentives to encourage adoption. This will change on April 1, 2025, when electric vehicles will face the same £195 annual charge as petrol and diesel cars. The new rule applies to all EVs, not just newly registered ones.
While this represents an additional cost for EV owners, there’s a simple way to delay the impact.
Sam Sheehan, motoring editor at used EV seller Cinch, explains how drivers could collectively save £273 million.
“Electric car drivers have long enjoyed free road tax, but that’s set to change from April when electric cars registered between April 1, 2017 and March 31, 2025 will pay the same standard £195 road tax rate as petrol, diesel and hybrid cars,” Sheehan said.
“However, savvy EV drivers can get another year of free road tax if they renew by March 31 2025. All they need to do is renew their tax on the government’s website before March 31, 2025 by putting in their car’s number plate and the 12-digit reference number on their V5C (log book).”
The renewal process might seem counterintuitive at first.
“The form will ask if they’re sure because, normally, renewing early changes the renewal date and means paying twice for road tax until the original renewal date. But since EV road tax is currently free, this doesn’t matter,” Sheehan noted.
With approximately 1.4 million electric cars currently on UK roads, the potential savings could exceed £270 million if all drivers take advantage of this opportunity.
Buyers of new electric vehicles won’t benefit from the same loophole, Sheehan warned.
“Those that buy new EVs won’t be so lucky, since electric cars registered after 1 April 2025 will be subject to the standard road tax rate, and the expensive car supplement if they cost £40,000, from their second year on the road. The first-year tax rate for new EVs is only £10 at least – although this used to be free, too.”
