EV drivers could save £273m in 2025 with this tax trick

Electric car drivers have been advised to take quick action to save themselves hundreds of pounds ahead of this year’s vehicle tax changes.

Until now EVs have been exempt from vehicle excise duty (VED) – better known as car tax – to help incentivise buyers. However, from April 1, 2025, they will become liable for the same £195 per year charge as petrol and diesel cars, and the change applies to all EVs, not just ones registered from this April.

While the change will add to the costs for EV owners, Sam Sheehan, motoring editor of used EV seller Cinch, has a tip that could save drivers a collective £273 million this year.

Sheehan commented: “Electric car drivers have long enjoyed free road tax, but that’s set to change from April when electric cars registered between April 1, 2017 and March 31, 2025 will pay the same standard £195 road tax rate as petrol, diesel and hybrid cars.

“However, savvy EV drivers can get another year of free road tax if they renew by March 31 2025. All they need to do is renew their tax on the government’s website before March 31, 2025 by putting in their car’s number plate and the 12-digit reference number on their V5C (log book).

“The form will ask if they’re sure because, normally, renewing early changes the renewal date and means paying twice for road tax until the original renewal date. But since EV road tax is currently free, this doesn’t matter.”

With up to 1.4 million electric cars now on the UK’s roads Sheehan says the potential saving if every driver acts before April could exceed £270m.

Sheehan added: “Those that buy new EVs won’t be so lucky, since electric cars registered after 1 April 2025 will be subject to the standard road tax rate, and the expensive car supplement if they cost £40,000, from their second year on the road. The first-year tax rate for new EVs is only £10 at least – although this used to be free, too.”