Experts have issued a warning that upcoming car tax changes set to roll out across the UK next year will hit "hundreds of thousands" of motorists . This is particularly the case for electric vehicle (EV) owners who will be subject to Vehicle Excise Duty (VED) fees for the first time come next spring. The removal of a major incentive is expected to level the playing field, as EVs will incur the same standard VED charge as their petrol and diesel counterparts, which currently stands at £190 annually - a figure that might rise following a review next year.
The RAC , known for their breakdown expertise and car insurance advice, highlighted concerns that running costs for EV owners are set to increase, potentially catching many by surprise. They explained: "Electric vehicles (EVs) currently enjoy free road tax (also called Vehicle Excise Duty). However, from April 1 2025, drivers of electric cars in the UK will need to pay road tax for the first time.
" They further warned that the new 2025 VED rules will affect hundreds of thousands of EV owners by increasing their electric vehicle running costs. Additionally, a 'luxury car tax' could see many EV owners paying even higher fees, with vehicles valued over £40,000 subjected to a £410 charge for five years after the model is first registered. This could disproportionately impact EV owners due to the typically higher upfront costs associated with electric models compared to traditional combustion engine vehicles.
The RAC has warned that electric vehicle owners are in for a shock, as they will be hit with road tax charges for the first time ever. "As well as paying for road tax for the first time, there will also be an expensive car tax supplement for electric cars with a list price that exceeds £40,000," they warned. "Many of the road tax changes will be backdated, which means drivers who have never paid for VED before will be required to do so after April 1 2025.
" This controversial policy was initially introduced by former Chancellor Jeremy Hunt in November 2022, and despite a change in government, Labour has not scrapped the plan, reports the Express . HM Revenue and Customs (HMRC) has previously stated their intention to "continue to use the tax system to support the transition" to electric vehicles (EVs). Nevertheless, they have emphasised that the new charges are about fairness, ensuring EV drivers "pay a fairer tax contribution" for road usage.
The statement added: "This measure will impact on individuals who own an electric car, van or motorcycle. These individuals will now need to pay VED on their vehicles. Changes will come into effect from 1 April 2025.
For existing vehicles, changes to VED rates will apply from the vehicle's annual renewal date for the 2025-26 financial year.".
