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How Much Will Electric Car Tax Be?

Jul 8, 2023

Today, we’re setting off on a journey through a topic that’s buzzing throughout the UK: How much will electric car tax be? As the world steadily charges towards an era dominated by electric vehicles (EVs), it’s critical to understand all the financial aspects involved.

Our transition from conventional vehicles to EVs signifies a drastic shift in how the government generates revenue from motorists. While the current system heavily depends on fuel taxes, with the spotlight now on EVs, things are bound to change. So, fasten your seatbelts and let’s navigate through the UK’s EV tax landscape.

Navigating Current Vehicle Tax Laws in the UK

Our first stop is an understanding of the existing car tax rules in the UK, established in the Spring Budget 2023. For vehicles first registered after 1 April 2017, the tax system is relatively straightforward.

The first-year tax rate hinges on a vehicle’s CO2 emissions. However, it’s worth noting that this rate has seen an increase since 1 April 2020 due to changes in CO2 measurement methods.

From the second year onwards, a standard rate applies. Currently, effective April 2023, this stands at £180 for petrol and diesel cars and £170 for hybrids and alternative fuel vehicles.

Electric Vehicle Tax: What’s the Score?

So, where does that leave us with our primary question, “How much will electric car tax be?” For now, electric vehicles are completely exempt from car tax until 2025. But this tax-free period is set to change.

The Spring Budget 2023 outlines that for new EVs registered after 1 April 2025, owners will be subject to both a first-year rate and the standard rate thereafter.

Additionally, an extra tax of £390 per year for the first five years applies to cars that cost over £40,000 when new. Though EVs were exempt from this rule as of 1 April 2020, this will no longer be the case for EVs registered after 1 April 2025.

Exploring the Future of Electric Car Tax

As we contemplate “How much will electric car tax be in the future?”, it’s clear we’re heading towards a significant reshaping of vehicle tax policies.

A mileage-based tax system, where owners pay tax based on the distance they travel, is one potential change. This would level the playing field and link the tax paid directly to road usage, irrespective of the vehicle type.

Your Electric Car Tax Queries Answered: FAQs

Let’s dig deeper and address some of the most common queries about electric car tax:

  • What are the existing car tax rates in the UK? From April 2023, the standard annual car tax rate is £180 for petrol and diesel cars, and £170 for hybrid and alternative fuel cars.
  • Is there a car tax for electric cars in the UK? At present, electric vehicles are exempt from car tax until 2025. But for new EVs registered after 1 April 2025, owners will pay a first-year rate and the standard rate thereafter.
  • What’s the tax rate for high-end cars? Cars costing more than £40,000 when new attract an extra tax of £390 per year for five years, in addition to the standard rate. This will apply to all cars, including EVs registered after 1 April 2025.
  • How is the first-year tax rate determined? The first-year tax rate is gauged based on the CO2 emissions of your car. However, since 1 April 2020, this rate has risen due to alterations in CO2 measurement tests.

Signing Off: Towards a Greener Future

Deciphering “How much will electric car tax be?” isn’t just about crunching numbers. It’s about grasping the broader societal shift towards eco-friendly transport. As we venture down this road, the car tax scenario in the UK will evolve, and staying informed will be key to adapting seamlessly.

As we gear up for an electrified future, let’s continue our exploration and keep asking, “How much will electric car tax be?” We promise to keep you updated with any new developments. Here’s to driving towards a cleaner, greener, and more sustainable tomorrow!


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