How much does it cost to tax an electric car (UK)?

How do electric cars pay road tax?

Road tax is simply a fact of life when it comes to car ownership…or is it? If you’re considering an electric car then their benefits may quickly dispel any doubts you have about leaving petrol behind. For example, electric vehicles don’t pay the congestion charge and are free from the ULEZ, but do you have to pay road tax on electric cars? Read on to find out!

Do electric cars pay road tax?

No, if your electric car is pure battery (meaning you have to charge your car it to drive it) then it’s free from Vehicle Excise Duty (VED), a.k.a. road tax. Add that to the other handy benefits that come with driving an electric vehicle (EV) and making the switch to electric might just be a smart cost-saving exercise. Especially with the 2030 switchover looming.

Do hybrid cars pay road tax?

Yes, hybrid cars have to pay road tax, but they get a lower rate than traditional full petrol or diesel cars. This is because hybrid cars still use traditional fuel as well as their electric motors, leading to CO2 emissions.  

How is road tax calculated? 

Road tax is calculated in different ways depending on the age of your car:

  • The VED of cars registered after March 2001 is based on CO2 tailpipe emissions
  • The VED of cars registered before March 2001 is based on engine size

So, that means battery electric cars are exempt from road tax due to their zero emissions and absence of an engine. Road tax will be charged at a reduced first-year rate if your CO2 emissions are particularly low, but it doesn’t stay that way, increasing from year 2 onwards:

CO2 emissionsTax rate (Year 1)Tax rate (Year 2 onwards)
0g/km£0£0
1-50g/km£0£145
51-75g/km£15£145
76-90g/km£105£145
91-100g/km£130£145
101-110g/km£150£145

Why have I been fined for not paying road tax on my electric car?

Electric cars don’t have to pay road tax, but that doesn’t mean you don’t have to apply for it. So, while you may have saved yourself the cost, unfortunately, you haven’t saved yourself the admin. 

You’ll get your yearly reminder to pay your road tax as usual, and you will need to follow the normal process, except you don’t pay anything at the end. Do not ignore your renewal notice or you could be hit with a fine of up to  £1,000.

do electric cars pay road tax?
Road tax is based on CO2 emissions, which means zero-emissions vehicles are exempt.

How do electric cars pay road tax?

They don’t! But you’ll still need to apply for road tax or you may have to pay a hefty fine. The same goes for any SORN declarations. Electric cars may be the greener choice, but when it comes to the regular admin of taking a vehicle out on the road, they have to follow the same rules. 

What is the £40,000 road tax rule?

There is also an additional charge placed on particularly pricey cars that aren’t EVs. If your hybrid cost more than £40,000, then a supplement of £335 will apply from years 2-5 of your road tax payments. That’s after you pay the VED itself, so going for a costly car may be an expensive option in the long run, too. Here’s a quick breakdown of your yearly costs if you own a particularly premium car:

FuelRoad taxSupplementTotal
Diesel/Petrol£155£335£490
Alternative£145£335£480
Electric/ hydrogen fuel£0£0£0

It’s also worth mentioning that that supplementary charge placed on hybrids worth more than £40,000 previously impacted EV owners too, like those who splashed out on a Tesla. It was changed in 2020. Now, electric vehicles are road tax exempt no matter how much they cost. 

That’s not to say it will last, though. The change only applies to cars purchased before 31 March 2025, so in a few years time, the supplement may rear its head once again. 

Will I have to pay car tax on electric cars after 2030?

Once 2030 rolls around and petrol and diesel cars are no longer being sold, it’s expected that preferential treatment for EVs will have to be eliminated. After all, the HM Treasury is unlikely to let the majority of the nation’s drivers do so completely tax-free. 

There has been no clear indication of what impact the switch will have on road tax costs. But it’s probably safe to assume that if you want to enjoy £0 charges you’re best to buy an electric car sooner rather than later.

Ready to go electric?

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