Luxury road tax rates for electric vehicles after April 2025

Goudy

Grumpy_chap said:

Goudy said:

By the looks of it, it's a balancing up exercise at least in the short term.

Which is fair enough but rather odd that the "balancing up" did not also cover older ICE cars, some of which will continue to benefit from the £zero and £30 rates.

They'll soon die off.
The newest on these pre April 2017 brackets are now over 7 years old.
Our lad has already killed two of them off recently and now working on a third, judging by the early results, it won't be long!

Also not all cars were in those low brackets, only the first 4 brackets are under the set £190 that is now the standard for post April 2017 cars.
There are 9 more brackets £190 and above, all the way up to £735.
So the average of all those bracket costs are over the current £190, probably a little different when you average all the cars on those different brackets but I bet not by much.

They also pay fuel duty.

As others have said "I'll put my tin hat on", but in all honesty, it's the EV situation that is causing treasury concern.
It's why there is all this talk of road pricing. Everyone knows and are just waiting to see whatever government is in charge will do about it.

VED is one thing, but fuel duty is a large income for the government.
53p for every litre bought and according to the fuel industry (UKPIA), they sold around 46 million litres of petrol and 74 million litres of diesel a day last year.
That's a lot of 53p's plus there's VAT at 20% on petrol and diesel.

So compare all that fuel duty and 20% VAT income to no fuel duty and if home charged only 5% VAT.

If you're a current EV owner, the VED change isn't really going to hamper you that much, you are still far from even in the tax department with anything else on the road, even ICE's on £0 VED and there is nothing in place to capture any equivalent duty from them, yet.
 
There is other ways in the short term to try and claw some of that missing revenue back, like unfreezing fuel duty.
It's been been frozen since 2011 but doing that is going to hammer everyone, not just car owners.

All our food and other goods are transported by road and if the transport costs go up, so does the goods, which pushes inflation up, so that won't be an easy choice for the chancellor.

So they need something else and pretty quick.

mongoose2009

the games up for EV owners you had it good for a few years and now its business as usual
so there are about 33 million cars and the GVT rakes in £40 Billion in taxes off them fuel duty and VAT etc
so the state needs £1200 a year off all road users 

right so with ICE its pretty easy and thats what VED and fuel duty was a cost per mile easy peasy
now the big problem has emerged with EVs  home charging and public charging

currently few will buy a EV without home charging cheaply off peak EV brag about it fine good for you
but only a naive or stupid person would think that would last forever so here comes the road pricing and with EVs its easy peasy the car will be about to tell the state exactly what mileage you do and send you a nice bill every month
so instead of 3p mile you now pay that GVT will tack on a 10-12p a mile charge and £600 VED so similar to a ICE of 15p mile add in the ULEZ will be added and the congestion charge will also get bunged on

so a ICE and EV cost the same to run and no freebies for EVs anymore 
well labour is all about equailty right?

now the problems start what if you CANT charge cheaply and are forced to charge publicly abot half the population especially in the citys  its already as expensive as a ICE and they will ALSO have to pay 10p a mile road pricing?
good luck with that!
and remeber the GVT is MANDATING you buy one by 2030

a easy target for the torys to do end the mandate if you cant home charge

Petriix

Without getting "political", the obvious solution to falling revenue from vehicle related taxes is to progressively increase the taxes on the more polluting vehicles while keeping it low for the least damaging ones. Keeping the low rate for older diesels while retrospectively hitting more recent EVs is a regressive move which incentivises delaying the switch to EV. 

Goudy

Petriix said:

Without getting "political", the obvious solution to falling revenue from vehicle related taxes is to progressively increase the taxes on the more polluting vehicles while keeping it low for the least damaging ones. Keeping the low rate for older diesels while retrospectively hitting more recent EVs is a regressive move which incentivises delaying the switch to EV. 

But that's a self defeating plan.
There will be less and less older polluting cars until eventually there will be no older polluting cars.
It's an ever decreasing circle of income and at some point there has got to be a shift.

It would be better gradual but it could just be a simple hard shift at some point.

Your idea is what we already have. Polluting cars, ie ICE's pay more to the treasury than EV's and it's not enough now with 1.2 million EV's out of 41 million or so vehicles.
In the near future when emission less vehicles are mandated, what's the plan then?

Let's not kid ourselves an EV is a choice at the moment, that's not going to be the case in a few years.
The market is already gearing up for it.
Your base popular ICE hatchbacks are disappearing from showrooms. Some manufacturers are no longer making diesels anymore and one of the UK's cheapest new cars is an EV. (the Dacia Spring)

Incentives need to be paid for. They may not be obvious, like a big cash discounts but they are there at the moment for EV drivers in the form of fuel duty and some possible/more than likely VAT on fuel.
These now have to be paid for somehow.

So to say lets make others, which is only going to get less and less pay for it is not only unfair.
It's going to push them away from them. They'll either just swap to an EV or give up driving and the problem gets worse sooner, so the fix is quicker and harsher probably for everyone not just drivers.

We're were sold EV's with these incentives under the guise of them being environmentally friendly.
That point is still valid but there was always going to be a cost to that in the form of government revenue and they were never ever going to let that carry on, in fact they pushed the mandate back for banning the sale of ICE's for various reasons, one of which is there was nothing in the planning stage to recoup that lost revenue from fuel duty. Even the last government weren't stupid enough to not see that.

But writing that, it's probably part of what will happen, they'll likely unfreeze fuel duty soon enough and f**k up inflation again.
But that's still not enough as it's a double edged sword. Sky high prices mean people will just spend less and VAT suffers so they go looking elsewhere.

As I wrote earlier, it's going to be a balancing up.
EV's won't pay more, as in more than ICE's even if they introduce a pay per mile system. They'll not give up fuel duty totally, it's too good a things and basically costs them very little to collect.

The incentive to swap would be still there and when everyone has, they'll increase the fees to bring up the revenue to whatever they see fit.

Herzlos

EV's are definitely the future beyond some niche cases. Petrol is going to be horribly expensive when you're one a handful of cars still using it. ICE is never going to be cheaper than EV.

JamesNewton77

What's the consensus? I have contacted the DVLA and they said it's any electric car. i.e pre 1 April 2025 but on various websites including which, it states it only applies to new cars registered after that date. "The £40,000 expensive car supplement is not being backdated, so an electric car first registered in 2024, for example, will not have to pay the supplementary rate of £410 on top of the standard rate from April 2025"

Mildly_Miffed

JamesNewton77 said:

What's the consensus? I have contacted the DVLA and they said it's any electric car. i.e pre 1 April 2025 but on various websites including which, it states it only applies to new cars registered after that date. "The £40,000 expensive car supplement is not being backdated, so an electric car first registered in 2024, for example, will not have to pay the supplementary rate of £410 on top of the standard rate from April 2025"

That is the situation, as announced in the March 2024 budget.

From 1/4/25...
Pre-1/4/17 reg'd BEV (regardless of original list price) = Lowest chargeable CO2-band VED, currently Band B, £20
1/4/17-1/4/25 reg'd BEV (regardless of original list price) = normal flat rate tax, currently £190
1/4/25-on reg'd BEV (<£40k list) = normal flat rate tax, currently £190
1/4/25-on reg'd BEV (£40k+ list) = normal flat rate plus higher rate premium for 5yrs, currently £190 + £410 = £600

The October 2024 budget might or might not change that.

Horse's mouth :-
https://www.gov.uk/guidance/vehicle-tax-for-electric-and-low-emissions-vehicles
https://www.gov.uk/vehicle-tax-rate-tables

born_again

Electric and low emission cars registered between 1 April 2017 and 31 March 2025

You will pay the standard rate. This is £190 for 2024 but is subject to change for 2025.

Additional rate (expensive car supplement)

For new electric vehicles with a list price exceeding £40,000, you will now need to pay the expensive car supplement from the second tax payment onwards. This applies to vehicles registered on or after 1 April 2025.

From you 1st link.

JamesNewton77

On Autotrader

Additional tax for cars over £40,000

If your new car has a list price of more than £40,000, you’ll pay an additional rate or premium car tax. In financial year 2024-25, this premium tax is £410. This kicks in when you pay your second lot of VED (i.e. after the first year is complete) and is payable on top of the standard rate of VED.
You’ll pay this for the first five years after the car’s registration. Electric cars are exempt from paying additional rate tax this year. The rate of VED is calculated on the list price of a car, so it’ll include any options you add. If you’re buying a £39,000 car and pop a few extras on, you could send the list price over £40,000 and be subject to the £410 supplement.

Think I will just avoid the extras that will take it over 40k just to be safe

henry24

It's good that at last things are equalling out, cars should be bought on the needs of the driver not government subsidy