Luxury road tax rates for electric vehicles after April 2025

Goudy

Badboi said:

Hoping the diesels that pay £30 get dragged into paying a proper road tax too…ridiculous that electric pays £180 ish and a 8year old diesel gets away with £20-£30 a year 

But you're quids in when it comes to fuel duty, so it's not exactly ridiculous.

Charge at home and you only pay 5% VAT and no fuel duty.
On a on street charger (business rate VAT) is 20% VAT and no fuel duty.

Fuel duty on diesel is 53p a litre and you also pay VAT at 20%.
There is no fuel duty on electric for car use. (not yet anyway)

Yet say a diesel driver gets 40mpg and does 8000 miles a year, that's 200 gallons.
£2.40 of fuel duty per UK gallon and that's £480 in fuel duty.
Plus the VAT at 20%.

Unfortunately unlike a EV driver, a diesel driver can't fill up at home and only pay 5% VAT.
The option to do with comes with a massive fine.

So apart from all the fuel duty that a diesel driver has to pay and an EV driver doesn't, what is ridiculous is the fact a EV driver can legally "dodge" 15% of VAT just by filling up at home and a diesel driver can't.

But I'm sure the government have noticed those gaps and will have plans on filling them in the near future.
That's still not ridiculous, it's more like even.

ididgetwhereiamtoday

None of it makes sense to me. So a smelly old diesel car will potentially pay less road tax than a modern clean EV?
It's horrible in congested areas driving behind ICE cars, I am breathing in their pollution.

Where is the incentive to buy EVs? Some other countries are still offering financial incentives to go EV but not the UK!
Why can't we do what North America does and offer big discounts to British built EVs from the likes of Nissan, Mini and Vauxhall. 

Iceweasel

I think it would be a good idea to have a tax on all vehicles where 100% of the money raised would be used to build and repair the roads.
We could call it 'Highway Tax'.
We haven't had such a tax since Road Tax was abolished around1937 I think.
Fuel Duty should go towards roads too.
EV charging points should have a tax on the electricity supplied to go towards roads too.

Goudy

ididgetwhereiamtoday said:

None of it makes sense to me. So a smelly old diesel car will potentially pay less road tax than a modern clean EV?
It's horrible in congested areas driving behind ICE cars, I am breathing in their pollution.

Where is the incentive to buy EVs? Some other countries are still offering financial incentives to go EV but not the UK!
Why can't we do what North America does and offer big discounts to British built EVs from the likes of Nissan, Mini and Vauxhall. 

Less VED but more, lots and lots more tax revenue over all for a diesel/petrol driver. In the form of fuel duty and VAT.

Incentives cost money, which the government hasn't got.

What are the sort of incentives were you thinking of for the 40 million vehicles on the UK roads?
(there's actually over 41 million but 1.2 million are already expected to be EV's by the end of this year).

£3000 or £4000 each?

Those 1.2 million already cost the treasury around £500 each (if you work them out averaging 8000 miles a year) in fuel duty.
Plus whatever VAT is saved through home charging.

Herzlos

ididgetwhereiamtoday said:

None of it makes sense to me. So a smelly old diesel car will potentially pay less road tax than a modern clean EV?
It's horrible in congested areas driving behind ICE cars, I am breathing in their pollution.

They generally don't make retroactive changes, so until the band prices go up enough there will be a point where a diesel car may pay less VED than an EV. The EV will still be paying less tax overall though via fuel duty and VAT.

ididgetwhereiamtoday said:

Where is the incentive to buy EVs?

Nicer to drive, higher performance, quieter, remote heating, reduced maintenance and running costs, and if you don't do huge mileages and have off-road parking you don't need to waste time going to petrol stations.

born_again

Herzlos said:

They generally don't make retroactive changes, so until the band prices go up enough there will be a point where a diesel car may pay less VED than an EV. The EV will still be paying less tax overall though via fuel duty and VAT.

In this case they have. As older EV's, & my understanding is that all other ICE will also pay the same base rate of VED, which as a EV driver is a fair outcome to all.

A incentive to swap to EV is in the lack of fuel duty. 
So from my HEV which cost £548 in petrol in the previous year. Compared to my EV £131 in Electric. This is covering roughly the same miles over the same period of the year.
£400 saving is a nice incentive at the moment to switch.

Herzlos

born_again said:

Herzlos said:

They generally don't make retroactive changes, so until the band prices go up enough there will be a point where a diesel car may pay less VED than an EV. The EV will still be paying less tax overall though via fuel duty and VAT.

In this case they have. As older EV's, & my understanding is that all other ICE will also pay the same base rate of VED, which as a EV driver is a fair outcome to all.

Yeah they are essentially removing the <100g/km bands, so EV's before 2017 will got £20/year and 2017 onwards will to go to £190/year. I certainly don't think that'll be enough to put off EV buyers since as you said you'd still saving double that in fuel alone.

It certainly seems pretty fair, as EV's still use the roads even without the emissions.

Car_54

Iceweasel said:

I think it would be a good idea to have a tax on all vehicles where 100% of the money raised would be used to build and repair the roads.
We could call it 'Highway Tax'.
We haven't had such a tax since Road Tax was abolished around1937 I think.
Fuel Duty should go towards roads too.
EV charging points should have a tax on the electricity supplied to go towards roads too.

So, you're happy for all taxes on car use to go on roads, and reduce the amount going to the NHS, education, defence, etc? 

How would you propose making up the deficit?

Car_54

Herzlos said:

born_again said:

Herzlos said:

They generally don't make retroactive changes, so until the band prices go up enough there will be a point where a diesel car may pay less VED than an EV. The EV will still be paying less tax overall though via fuel duty and VAT.

In this case they have. As older EV's, & my understanding is that all other ICE will also pay the same base rate of VED, which as a EV driver is a fair outcome to all.

Yeah they are essentially removing the <100g/km bands, so EV's before 2017 will got £20/year and 2017 onwards will to go to £190/year. I certainly don't think that'll be enough to put off EV buyers since as you said you'd still saving double that in fuel alone.

It certainly seems pretty fair, as EV's still use the roads even without the emissions.

EVs do indeed use the roads, but VED has absolutely nothing to do with road use.

Hoenir

Car_54 said:

Hoenir said:

Iceweasel said:

£40,000 isn't exactly luxury anymore though, is it?

How many are actually purchased as opposed to rented? 

Is that relevant? The luxury tax is based on the manufacturer’s list price, whether it’s paid or not.

You don't need capital to drive an expensive vehicle. How many are bought outright by private individuals.