EV owners should re-tax their car before April to save close to £200 over the next twelve months.
The advice follows new research from Motorpoint which revealed that 83% of EV owners were unaware that they would likely need to pay more tax from April 2025.
A survey of 2,000 UK car owners carried out by the leading used car retailer found that a third (33%) believed that EVs should remain in a lower tax band than petrol and diesel cars, and four-fifths (80%) felt that the government could do more to encourage EV adoption.
EVs currently benefit from a road tax exemption, meaning that there is no charge for motorists when taxing their electric vehicles. From April 2025 onwards this will be changing, and EV owners will be charged up to £620 in road tax.
With the changes coming into effect in just a few weeks, Mike Vousden, Motorpoint’s resident EV expert has shared the things EV owners should be aware of and the simple task that will allow motorists to maximise the current road tax exemption for electric vehicles.
Why is road tax for EV owners changing?
“Plans to remove the road tax incentive for EV owners were first announced in the Autumn Budget back in 2022, when it was predicted that over half of all new vehicles would be electric by 2025. While we know that EVs make up closer to 20% of all new car sales today, the deadline for removing the exemption has remained the same.
“At a simple level, as more car owners make the move to electric, the current exemption means that fewer motorists are paying vehicle excise duty (also known as road tax). So, there’s less tax being collected from motorists.
“The government is also losing out on fuel duty as EVs don’t require petrol or diesel, which has tax baked into the price at the pump. The government has predicted that the loss of these two major sources of motor taxation could result in a ‘£35 billion black hole in finances’ – making the current system unsustainable.”1
How much road tax will EV owners pay?
“Understanding the taxation policy for electric vehicles can be quite complicated, but if an EV was first registered before 31 March 2017, motorists will be expected to pay £20 per year.
“If it was registered between 1 April 2017 and 31 March, 2025, it will be £195 per year from the start of this April. Anyone planning to buy a new EV after 1 April 2025 will pay £10 in the first year and then £195 – or more – in every subsequent year.”
How can EV owners save themselves £195 over the next 12 months?
“Motorists might not realise that they can re-tax their car at any time, meaning an EV owner could effectively extend their road tax exemption by 11 months if they were to re-tax in March 2025 – ahead of the rules changing.
“This means that you’ll be delaying your payment until March 2026 when it’ll need renewing again – saving yourself £195. It’s undoubtedly a quirk in the system but something for EV owners to consider.
“Keep in mind that when you re-tax your car, you’ll be charged from the start of the month, so there’s no benefit to waiting until the end of March to renew. In fact, I’d suggest setting a reminder and doing it on the 1st of March.”
For more information, and to find out how if your road tax will be changing after 1 April 2025, visit: https://www.motorpoint.co.uk/guides/road-tax-bands-explained
