Thousands of Brits will be hit with a £195 bill in April following a major driving shakeup. It comes as the UK government is set to start subjecting electric, zero, or low-emission cars to vehicle tax in the same way as those driving in petrol and diesel cars.
While the government introduced the levy exemption to incentivise Brits to purchase cleaner vehicles, Jeremy Hunt’s Autumn Budget back in 2022 rescinded the benefit to make the ‘motoring tax system fairer’. It came amid predictions that over half of all new vehicles would be electric by 2025.
Speaking exclusively to the Mirror, Mike Vousden, Motorpoint‘s resident EV expert, said: “While we know that EVs make up closer to 20 per cent of all new car sales today, the deadline for removing the exemption has remained the same. At a simple level, as more car owners make the move to electric, the current exemption means that fewer motorists are paying vehicle excise duty (also known as road tax). So, there’s less tax being collected from motorists.
“The government is also losing out on fuel duty as EVs don’t require petrol or diesel, which has tax baked into the price at the pump. The government has predicted that the loss of these two major sources of motor taxation could result in a ‘£35 billion black hole in finances’ – making the current system unsustainable.”
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However, Martin Lewis‘ Money Savings Expert website has revealed a clever way to get around the £195 fee, but you must act quickly. “If your EV was first registered on or after 1 April 2017, make sure you re-tax it in March 2025 (it can be anytime BEFORE 1 April 2025, but to maximise the savings you should do it in March),” MSE wrote. “Doing this means you’ll push back the deadline for paying tax on your EV to when it’s next due for renewal in March 2026 (assuming you renew in March 2025).”
It doesn’t matter what month your tax is slated to expire on your EV. You can re-tax it anytime through the government’s website. When asked ‘Are you sure’ click accept. Last week, an HM Treasury spokesperson told the Mirror: “The shift to electric vehicles will support growth and productivity across the UK and is crucial for tackling climate change. Our approach ensures fiscal stability while providing incentives through the tax system such as freezing Vehicle Excise Duty First Year Rates for EVs to encourage the transition to electric and zero-emission vehicles.”
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