![]() This means that only cars that emit zero CO2 and cost less than £40,000 qualify for zero VED. In the UK, petrols and diesel new car sales are set to be banned in 2030.įrom 1 April 2017, all new cars are taxed against three new VED bands - zero, standard and premium - with taxation calculated on a combination of emissions and the list price of the vehicle. While EVs are still a relative rarity, sales are growing quickly and all the big manufacturers offer at least one electric model. If you have a regular long drive of more than 100 miles, we'd also advise checking what kind of charging infrastructure you can fall back on – one lonely charger (that's already in use at a service station) won't cut it if you're in a rush to get somewhere. If you're giving the idea genuine consideration, bear in mind that electric cars are at their least efficient on the motorway and best in town. ![]() Not just because it is more convenient but also because you can charge the car as you sleep, reaping the rewards of lovely off-peak electricity charges. In some respects, you'll be a pioneer – electric cars still make the most sense if you have somewhere you can charge one at home. Hallelujah, there's still a way to be exempt from car tax altogether – buy an electric car. The exemption for EVs from the £40,000 premium car tax will also end, as the Chancellor of the Exchequer attempts to plug a predicted £30 billion VED hole that will be caused by the mass uptake of electric vehicles with zero road tax. The Car Tax system will change again on 1 April 2025, with electric cars being charged VED for the first time. Aside from these changes, this is essentially the same system that was introduced on 1 April 2017. WLTP figures are designed to give you (and in this case the government) a true reflection of the CO2 emissions your car will produce when it is driven on the road.Īlong with the new testing, annual tax rates grew slightly (to account for inflation) and electric cars were handed an exemption from the £40,000 premium car tax that applies to petrols and diesels for five years after the car was sold. Working out your tax rate can be a headache, but here we explain exactly how each tax system works, which applies to you and how you can buy a car that pays no tax at all.Ĭars registered from 1 April 2020 onwardsĬhanges to the Car Tax (VED) system saw WLTP (Worldwide Harmonised Light Test Procedure) figures considered for the first time. The discount for hybrid cars will also end. This means millions of petrol and diesel cars that previously qualified for free car tax will now be charged £20 per year for VED. The Band A VED rate for cars registered between 1 March 2001 and 30 March 2017 is being scrapped, with all affected vehicles being moved to Band B. Things will change for petrol and diesel car drivers in 2025 too. Owners of electric cars with a list price of £40,000 will pay the premium rate, which would cost £370 based on today's figures. Older EVs registered before 1 April 2017 will pay as little as £20 per year from 2025, while electric cars registered after this date will be charged at the standard annual VED rate - based on current figures that would mean an annual rate of £180. The amount you pay will depend on the age and original price of your car. ![]() These changes mean that from 1 April 2025, electric car drivers will be required to pay for Car Tax. In addition, in November 2022 sweeping changes were made to the Car Tax system. You can see exactly what that will mean for you here. All but the lowest-emitting cars will see rates going up. The Budget in March 2023 included increases to car tax based on the Retail Price Index that will take effect from April 1st 2023. ![]() And to complicate matters, every year, the Chancellor comes along and changes it. How much is my Car Tax in 2023? Will VED increase soon? How do I get a car with cheap Car Tax? These are questions we've all asked ourselves at one point or another.Ĭar Tax - or Vehicle Excise Duty (VED) as it's officially called - is something that tends to affect us all.
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