VED Changes

[GPDP]

UK electric car owners will have to pay road tax from 1st April 2025... £165 per year for all cars from their 1st birthday (£10 for the first year).... also for those with a list price of over £40k when new and registered from 1st April 2025 there will be the £355 expensive car supplement tax to pay also.

Seems to me that a good time to change to a new EV would be just before April 2025, to avoid the £355 luxury car tax... or buy one under £40k if they still exist.

 

[Pink Duck]

It’s not been “road tax” since 1937 by the way.

April 2025 was chosen because of forecast that 50% of new vehicles would be EV by then.

A new EV of course attracting 20% tax by way of VAT…

 

[GPDP]

It’s not been “road tax” since 1937 by the way.

April 2025 was chosen because of forecast that 50% of new vehicles would be EV by then.

A new EV of course attracting 20% tax by way of VAT…

I'm just showing my age lol

 

[dbartram]

Isn't this news from Autumn 2022?

Here's a detail I found (one that makes me pretty happy): EVs registered before 31/3/2017 will pay at the Band B rate, £20 a year. (My Model S was registered on 28/3/2017...)

 

[BissetY]

Ouch…another win for a lease over cash

 

[Billbrown1982]

UK electric car owners will have to pay road tax from 1st April 2025... £165 per year for all cars from their 1st birthday (£10 for the first year).... also for those with a list price of over £40k when new and registered from 1st April 2025 there will be the £355 expensive car supplement tax to pay also.

Seems to me that a good time to change to a new EV would be just before April 2025, to avoid the £355 luxury car tax... or buy one under £40k if they still exist.

Annoyingly that is when my standard warranty expires and my long standing "plan" of keeping this car for years and years is rapidly starting to look less and less likely.

 

[Tony Hoyle]

I'm considering not having a car after this one.. To go from low tax (small diesel of which was about £10 a year) to no tax (EV) then suddenly have it jump to £520, along with insurance prices going nuts, it's rapidly getting to the point where it's not worth it.

 

[Ian James]

Ouch…another win for a lease over cash

You still pay for it in a lease one way or another….they don’t just forget the VED

 

[Ian James]

UK electric car owners will have to pay road tax from 1st April 2025... £165 per year for all cars from their 1st birthday (£10 for the first year).... also for those with a list price of over £40k when new and registered from 1st April 2025 there will be the £355 expensive car supplement tax to pay also.

Seems to me that a good time to change to a new EV would be just before April 2025, to avoid the £355 luxury car tax... or buy one under £40k if they still exist.

This is old news……but funnily enough I was looking at it again yesterday. I’m sure Labour will scrap it.

 

[Jason71]

UK electric car owners will have to pay road tax from 1st April 2025... £165 per year for all cars from their 1st birthday (£10 for the first year).... also for those with a list price of over £40k when new and registered from 1st April 2025 there will be the £355 expensive car supplement tax to pay also.

Seems to me that a good time to change to a new EV would be just before April 2025, to avoid the £355 luxury car tax... or buy one under £40k if they still exist.

just as important for those of us who already have one is to re-tax it during March 2025 irrespective of when the VED is due to kick the £165 can down the road for another 11 months.

 

[KennethS]

I'm considering not having a car after this one.. To go from low tax (small diesel of which was about £10 a year) to no tax (EV) then suddenly have it jump to £520, along with insurance prices going nuts, it's rapidly getting to the point where it's not worth it.

Perhaps that is part of their plan. Pricing many from being able to afford a car.

 

[GRiLLA]

Perhaps that is part of their plan. Pricing many from being able to afford a car.

The thought that the current shower of politicians are capable of having a plan is the funniest thing on here today.

The flip-flop of policies towards EVs and frankly everything else is the only defining characteristic of this last parliament. It'll change again with a new regime next year, so it's not worth making any monumental decisions based on what they pretend will happen in the future while it's far from certain we will have the same prime minister by the end of the day.

If £500 in tax is the tipping point as to whether you need a car at all, maybe you really should be using more environmentally friendly public transport anyway.

 

[Jason71]

Perhaps that is part of their plan. Pricing many from being able to afford a car.

the way things are going at present by year 5 the VED will be more than the value of the car

 

[Fat Wolfie]

Based on no information whatsoever, I think that at some point all ICE will have higher VED than BEVs. It seems a bit odd that you can get an ICE with low emmisons running in a town being taxed at £20 a year, and yet a small EV (Fiat 500 for example, ideal city car) paying £165. Either that or emission zones will become more widespread and non BEVs will get stung.

 

[thewishy]

Biggest issue is the 40k expensive vehicle tax. Should be +10k for a BEV IMHO

 

[Fursty Ferret]

Yes, it's interesting that they're able to retrospectively change the banding for EVs but not the ropier diesels from a few years ago.

 

[ajmorr.is]

Biggest issue is the 40k expensive vehicle tax. Should be +10k for a BEV IMHO

They do this in Australia currently - and the threshold is increasing next FY to reflect increase in purchase cost. They charge it differently though, instead of it being a fixed value, it's a % on each A$ above the threshold. Seems a far more sensible solution to me.

Luxury Car Tax (LCT) threshold increased for the 2023-24 financial year.

From the 1st of July 2023, the federal government will increase its Luxury Car Tax (LCT) thresholds helping many Australians save thousands on the price of a new vehicle. The LCT threshold for ‘fuel efficient’ vehicles will be raised from $84,916 to $89,332, and the LCT threshold for all other vehic

www.linkedin.com

 

[Jason71]

Biggest issue is the 40k expensive vehicle tax. Should be +10k for a BEV IMHO

The problem is it was a dumb tax when it was introduced in 2017 and its even dumber now that the threshold has not been raised since 2017. £40K is not an "expensive" vehicle these days even in ICE world. Bear in mind its based on LIST price. Some EV's are selling at less than 75% of list ( I bought one) . So you could actually buy a £30K car and still get hit with it.

Osborne wanted a quick way to raise money. A flat tax was great for him. DVLA could implement it quickly and it mainly hit the middle class not his rich mates like a progressive tax would have. AND it moved taxation away from being emissions based.
DoT as much as admitted in a white paper that it was a mistake but has yet to bother fixing it.

/rant

 

[Mark89052]

The problem is it was a dumb tax when it was introduced in 2017 and its even dumber now that the threshold has not been raised since 2017. £40K is not an "expensive" vehicle these days even in ICE world. Bear in mind its based on LIST price. Some EV's are selling at less than 75% of list ( I bought one) . So you could actually buy a £30K car and still get hit with it.

Osborne wanted a quick way to raise money. A flat tax was great for him. DVLA could implement it quickly and it mainly hit the middle class not his rich mates like a progressive tax would have. AND it moved taxation away from being emissions based.
DoT as much as admitted in a white paper that it was a mistake but has yet to bother fixing it.

/rant

Yep that is annoying the threshold doesn’t go up yet the put the actual surcharge up each year, started of at £300 extra now around £390?

 

[Kithran]

The problem is it was a dumb tax when it was introduced in 2017 and its even dumber now that the threshold has not been raised since 2017. £40K is not an "expensive" vehicle these days even in ICE world. Bear in mind its based on LIST price. Some EV's are selling at less than 75% of list ( I bought one) . So you could actually buy a £30K car and still get hit with it.

Osborne wanted a quick way to raise money. A flat tax was great for him. DVLA could implement it quickly and it mainly hit the middle class not his rich mates like a progressive tax would have. AND it moved taxation away from being emissions based.
DoT as much as admitted in a white paper that it was a mistake but has yet to bother fixing it.

/rant

Oh its sillier than that - consider over covid when you had _massive_ waits on new cars. Whether or not the supplement depends on the list price _on registration_. I.E. you could be waiting for 12 + months for your new car then when it arrives get hit with the supplement even if the dealer is honouring the price when you ordered.

Also it wasn't that easy to implement for everyone - I know as I had to help implement it at work (not for the DVLA but for a company that produces software for the leasing industry)