Drive an electric vehicle? Act now to avoid road tax for a further 12 months

If you own an electric vehicle (EV), you’ve likely enjoyed paying zero road tax, but that’s about to change. 

From 1 April 2025, all EVs, hybrids, and alternative fuel vehicles will be subject to Vehicle Excise Duty (VED), just like petrol and diesel cars.  

This means that after years of exemption, you’ll now face annual road tax costs. 

However, you can delay your first payment by an extra 12 months – if you act before 31 March 2025. 

What is happening to electric vehicles? 

Currently, EVs fall into a tax-free band, but from April 2025, this exemption is ending.  

Depending on when your car was registered, you could look at an annual tax bill of up to £195 per year. Here’s a quick breakdown: 

• New EVs (registered on or after 1 April 2025) – £10 for the first year, then £195 annually. 

• EVs registered between April 2017 – March 2025 – £195 per year. 

• Older EVs (March 2001 – March 2017) – £20 per year. 

• Hybrids and AFVs: No more £10 discount, tax depends on emissions. 

• Electric vans – Subject to the standard light goods vehicle rate. 

• Expensive new EVs (£40,000+) – Additional ‘expensive car’ tax applies for five years. 

How can you extend your tax-free period? 

If you renew your road tax before 31 March 2025, you can lock in an extra year tax-free, even if your current tax has not expired yet. 

That means you won’t have to start paying road tax until April 2026, effectively postponing the charges and making the most of your exemption while it lasts. 

What should you do now? 

• If you own an EV, renew your tax before 31 March 2025 to delay your first tax bill. 

• Businesses with EV fleets should review their tax strategy now to avoid unexpected cost increases. 

• Need help planning? Speak with our tax experts to understand how this change impacts your finances. 

Don’t miss out – act before the deadline and save yourself an extra year of tax-free driving! Contact us for further advice and guidance.