Official: electric vehicles to pay VED from 2025
Electric vehicles are currently exempt from paying road tax
Plans to charge VED for electric cars, vans and motorcycles confirmed in Autumn Statement
Electric vehicles will be charged Vehicle Excise Duty (VED) from April 2025, chancellor Jeremy Hunt has announced.
Reading the Autumn Statement in the House of Commons, Hunt said the move would make the motoring tax system "fairer".
A social media post from the Treasury added that the change will ensure "all motorists begin to pay a fair share" and that government support for the charging infrastructure would continue.
Electric vehicle owners are currently exempt from paying the standard VED rate of £165 per year.
Benefit-in-kind tax on electric company cars will increase to 3% in April 2025, rising 1% each consecutive year, to 5% in 2027/28.
The RAC's head of roads policy, Nicholas Lyes, 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.
"Vehicle excise duty rates are unlikely to be a defining reason for vehicle choice, so 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.
“We estimate around 550,000 battery electric vehicles on the road now will be affected by the tax change in 2025, in addition to those that will be newly registered between now and then.”
Edmund King, president of the AA, said: "Whilst we understand that EVs will need to be taxed, we stress that the road to electrification must not be stalled by excessive taxation.
"There is no doubt the introduction of vehicle excise duty on EVs and making EV company cars less attractive by increasing tax rates, will slow the road to electrification.
"This may delay the environmental benefits and stall the introduction of EVs onto the second-hand car market. Unfortunately the Chancellor’s EV taxation actions will dim the incentive to switch to electric vehicles.”