Electric Car Tax

The ultimate guide on electric car tax covering what it is and how much it costs.

What is car tax?

Car tax (also known as road tax) is calculated by the CO2 tailpipe emissions for vehicles registered since March 2001. For cars registered before March 2001 the tax is calculated based on engine size.

How much will electric car tax cost?

As the CO2 emissions produced by electric cars and plug-in hybrids are zero or under 100g/km, these cars are currently being categorised in Vehicle Excise Duty (VED) band A and therefore are zero-rates for standard car tax.

However the electric car tax is changing from April 2017, a new set of VED bands will be introduced (there are currently 13) which will mean any vehicle with an engine will need to pay tax. Battery Electric Vehicles (BEVs) will remain in VED Band A, which stays at zero-rated standard tax for both the first year and all subsequent years. Whereas, Plug-in hybrid electric vehicles (PHEVs) are now likely to cost between £10 and £100 for the first year depending on CO2 emissions – and then £140 each year thereafter.

A premium rate will be applied to any vehicles that cost more than £40,000. This tax rate will need to be paid for the first 5 years the vehicle is on the road and is in addition to the VED charge mentioned above. BEVs will also be affected by premium rate but at a reduced rate of £310 per year.

The VED policy objective explains that a premium rate is added to ensure those who can afford more expensive cars (more than £40,000) make a fair contribution.

New VED system - standard and premium rates for cars registered from 2017:

Vehicle CO2 emissions First year rate (FYR) 2017-2018 Standard rate (SR)* 2017-2018 Premium rate (PR)** 2017-2018
0 g/km £0 £0 £310
1-50 g/km £10 £140 £450
51-75 g/km £25 £140 £450
76-90 g/km £100 £140 £450
91-100 g/km £120 £140 £450
101-110 g/km £140 £140 £450
The information above is subject to change

Do I still need to apply for electric vehicle tax if I am exempt?

Yes, even if you are exempt from electric car tax you will still need to apply. This can be done online at https://www.gov.uk/vehicle-tax or at your local Post Office.

As the tax disc has been abolished there is no need to worry about displaying any information. It is as simple as filling in the online form and your electric car will be covered.