What does the 2022 Autumn Statement mean for EV drivers?
Posted by Jasmin: Nov 23, 2022 • 2 min read
The Chancellor had a whole heap of bad news to deliver in his Autumn Statement, but that’s not so surprising with a bleak economic outlook.
Sadly some of that pain is to be heaped onto EV drivers. Here are the key tenets:
New EVs to pay standard rate of Vehicle Excise Duty (VED) from April 2025 onward
VED is often called “road tax” and it is probably unrealistic to suggest that EVs could avoid it forever, and @ £165 a year from the 2nd year of registration (just £10 in the first), this one isn’t too draconian, if still unwelcome.
VED taxation of cars registered between 1 April 2017 and 31 March 2025
With this catching all cars in the intervening period and even hitting some vehicles retroactively, this is a controversial move. It’s never great to have your tax burden increased after you did your sums on your car’s affordability and decided to buy. But again, the £165 a year costs aren’t too severe.
The demise of the Expensive Car Supplement exemption from April 2025
This one is material, adding £355 a year, on top of the £165 “standard rate”, making a £520 a year bill - a non-trivial sum - more than many will spend in electricity per year to run the EV. We would also quibble about the threshold. EVs are still expensive. So a £40,000 EV is really a mid-priced vehicle, even if it would be an expensive petrol car. We would call for this threshold to be reviewed for EVs.
Company Car Tax (CCT) Benefit-in-Kind (BiK) Rates announced until March 2028
Low CCT BiK rates have proven a really potent incentive to get drivers into EVs, even when their list prices have been comparatively high. Industry likes to know the rates at least 3 years into the future, so those lining up their new car can tell how much they’ll be paying (see controversy on retroactive VED). HMRC have chosen to increase the rates by 1% a year out to March 2028:
|Date||CCT BiK Rate|
|April 2022 - March 2025||2%|
|April 2025 - March 2026||3%|
|April 2026 - March 2027||4%|
|April 2027 - March 2028||5%|
While we’d ideally prefer to see no increase, these increases are gradual and the pain from them is probably outweighed by the certainty provided for the next 5 years.