From April 2025, all electric vehicles will have to start paying vehicle tax (VED).
This means that it will be the same way as petrol and diesel vehicles.
It is said, that this has been put in place so that it is fair that all road users contribute, not only petrol and diesel vehicles.
EV’s are continuing to accelerate as the Government ban date is creeping up.
What does this mean for EV’s?
Zero emission vehicles that are registered between 1st April 2017 and 31st March 2025, will need to pay the standard rate tax, which is currently £165.00.
However, any vehicles that are registered on or before 1st April 2025 that are the new zero emission cars, will be liable to pay the lowest first year rate of VED. Which is currently £10.00 a year. After the first year of registration onwards, owners will then move to the standard rate, which is £165.00.
The expensive car supplement exemption for EV’s is scheduled to end in 2025. This means that cars with zero emissions that are registered on or after 1st April 2025, will be liable for the expensive car supplement.
Any EV’s that has a list price exceeding £40,000.00, for 5 years, comes under the expensive car supplement.
All zero and low emission cars that were first registered between 1st March 2001 and 30th March 2017, will be moved from a Band A rate, to a Band B rate, which is currently £20.00 a year.
All zero emission vans will move to the same rate as petrol and diesel light goods vehicles. Which is currently £290.00 a year.
For motorcycles and tricycles with zero emissions will also move rate. They will move rate to a small engine size rate, which is currently £22.00 a year.
The VED rates for alternative hybrids and fuel vehicles will also be equalised.
Company Car Tax
The Government has said, that the company car tax rates will still continue to incentivise for EV’s.
They are setting rates for company car tax until April 2028. They have done this to provide long term certainty for tax payers and industries in the Autumn Finance Bill 2022.
For electric and ultra-low emission cars that release less than 75g of CO2 per kilometre, will be increased by 1%, in 2025-2026.
Then a further 1% increase will be in 2027-2028, with a maximum of 5% for EV’s and 21% for ultra-low emission cars.
The rates for other vehicles will be increased by 1% for 2025-2026, with a maximum of 37%. In 2026-2027 and 2027-2028 the rates will be fixed.
Charge Benefits
The Van Benefit Charge, and Car and Van Fuel Benefit Charges will increase in line with CPI. This will be from 6th April 2023.
In December 2022, the Government will legislate the way of regulations.
First Year Allowance for EV Chargepoints
The Government has said, that in the Spring Finance Bill 2023, they will legislate to extend the 100% first year allowance for EV chargepoints, up until 31st March 2025.
They have done this for corporation tax purposes and for the 5th April 2025 income.
