Road Tax on Electric Cars

A complete guide to road tax for electric cars, including how it’s calculated and how much it costs.

Summary

Road tax, officially known as Vehicle Excise Duty (VED), is calculated based on the CO2 tailpipe emissions of your vehicle, its list price and which year it was registered in.

  • Pure battery electric vehicles (BEVs) are exempt from VED.
  • Plug-in hybrid electric vehicles (PHEVs) pay reduced VED.
  • Any vehicle (including BEVs) with a list price of £40,000 or above will incur an additional premium rate for the first 5 years.

How Road Tax/Vehicle Excise Duty (VED) is calculated

VED is calculated according to the CO2 tailpipe emissions for all vehicles registered since March 2001. For cars registered before March 2001 the tax is calculated based on engine size.

Zero emission vehicles (BEVs) are exempt, plug-in hybrids (PHEVs) are subject to modest VED, but from April 2017 any car (including BEVs) that cost £40,000 or more have to pay an annual supplement for their first 5 years.

How much will Road Tax/Vehicle Excise Duty (VED) for an electric car cost?

Battery Electric Vehicles (BEVs)

Since April 2017 zero emission EVs (BEVs) are zero-rated standard tax for both the first year and all subsequent years. That means you don’t pay any road tax on a pure electric vehicle, as long as it doesn’t fall into the ‘Premium Rate’ category (see below).

Plug-in Hybrid Electric Vehicles (PHEVs)

PHEVs are now likely to cost between £10 and £100 for the first year depending on CO2 emissions – and then £140 each year thereafter.

Premium Rate

A premium rate applies to vehicles worth £40,000 or more, even BEVs. It will need to be paid for the first 5 years the vehicle is on the road and is in addition to any applicable VED charges.

Cars registered after 31st March 2017:

Vehicle CO2 emissions First year rate (FYR) 2018-19 Standard rate (SR) 2018-2019 Premium supplement (vehicles with list price >£40k)
0 g/km £0 £0 £320
1-50 g/km £0 £135 £320
51-75 g/km £15 £135 £320
76-90 g/km £100 £135 £320
91-100 g/km £120 £135 £320
101-110 g/km £140 £135 £320


Cars registered before 1st April 2017:

Vehicle CO2 emissions First year rate (FYR) 2018-19 Standard rate (SR) 2018-2019 Premium supplement (vehicles with list price >£40k)
0 g/km £0 £0 N/A
1-100 g/km £0 £0 N/A
101-110 g/km £10 £10 N/A

Tip: You still must tax your car each year, even if it is exempt! This can be done online at www.gov.uk/vehicle-tax or at your local Post Office. Many BEV drivers enjoy going through the VED process, since it is free!

Fuel Duty

The most productive form of motoring taxation for HM Treasury is the duty paid on petrol and diesel. Clearly this is still paid by PHEV drivers on their petrol, but not BEV drivers.

Given how productive fuel duty is, moving the UK to BEVs will cause a significant tax yield reduction. Rather than introducing Fuel Duty on electricity, other measures are likely. This subject is tackled in depth in this blog.

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