Britons are being urged to renew their car tax as soon as possible to save hundreds of pounds as Labour prepares to roll out massive Vehicle Excise Duty changes.
From April 1, 2025, the cheapest £0 VED rate will be abolished, meaning any vehicle of all fuel types will be required to pay the standard flat rate of tax.
Former Conservative Chancellor Jeremy Hunt announced plans to begin taxing zero emission vehicles in the 2022 Autumn Statement, saying that all drivers needed to pay a fair share to use the roads.
While the new charges could see drivers slapped with a £195 fee, experts are calling on drivers to avoid an agonising wait if they act soon.
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Drivers are being urged to make an urgent change ahead of car tax changes in April
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Paul Barker, editor of Auto Express, explained that drivers do not need to wait until their current VED has expired before taxing their car for another year, allowing them to avoid the £195 fee for another year.
He added: “A foible of the system means owners can opt to reset their annual renewal date to this month, even if they’ve still got weeks or months of their existing car tax left to run.
“Doing so will mean skipping the £195 standard charge for up to a full year, because anyone taxing an EV that was first registered after March 31, 2017, will be liable to pay VED at the standard rate from April.”
Chancellor Rachel Reeves announced a number of new Vehicle Excise Duty changes in the October Autumn Statement last year, including details on how car tax for all motorists will be changing.
The start of April will see new car tax changes impacting tens of millions of drivers with the standard rate for cars, vans and motorcycles increasing in line with inflation.
Electric vehicle owners will also have to start paying the Expensive Car Supplement if their EV costs more than £40,000.
The so-called “luxury car tax” will charge drivers £410 per year and is paid alongside the £195 per year standard rate if the car has an expensive list price.
The fee is paid for five years from the second year to the sixth year after the first registration. Prior to this year, electric vehicles have always been exemptm from the ECS.
Experts have consistently called for the Government to make changes to the Expensive Car Supplement since just three per cent of electric vehicles on the market are under £30,000, meaning many drivers will be liable to pay the fee.
Barker continued, saying: “Auto Express estimates that seven in ten battery cars registered in the UK are priced above £40k and therefore eligible to be levied with the ECS.
“This adds £410 to their annual VED rate for the first five years, which in total, is an extra £2,050, creating yet further cost barriers for drivers looking to transition to EVs.
“This charge will also apply when these cars are sold on, because regardless of the price paid for a used EV, if the car was registered after April 2025, it will be liable if it was originally bought for more than £40,000.”
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Campaigners have called on the Government to amend the terms of the Expensive Car Supplement
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Documents included in the Autumn Budget clarified that the Government recognised the “disproportionate impact” of the ECS on those looking to buy an electric vehicle.
However, it ruled out any immediate changes to the ECS threshold, saying instead that it would consider raising limits “only at a future fiscal event”.
Many automotive experts have called on the Government to raise the rate to £50,000 to incentivise more drivers to invest in a zero emission vehicle, with hopes this will be announced in the Chancellor’s upcoming March 26 Spring Statement.
