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Folkes Worton LLP

Save on Electric Vehicle Tax Before April 2025

The landscape of electric vehicle (EV) taxation is shifting, but EV owners can delay paying road tax by up to a year using a simple trick.

With Vehicle Excise Duty (VED) changes coming into effect on 1st April 2025, understanding the implications and potential strategies is crucial.

Understanding the VED Changes:

Currently, EVs are exempt from VED. However, this exemption is set to end. Here’s a breakdown of the new VED rates:

  • EVs registered before 31st March 2017: £20 per year.
  • EVs registered between 1st April 2017 and 31st March 2025: £195 per year.
  • EVs registered after 1st April 2025: £10 in the first year, then £195 per year.
  • EVs costing £40,000 or more and registered from 1st April 2025: Also subject to an ‘expensive car supplement’ of £410 per year.

The ‘Early Taxing’ Strategy:

A valuable opportunity exists for EV owners registered between 1st April 2017 and 31st March 2025, who face the £195 annual charge. While EVs are currently exempt, they still require annual registration through the V5C logbook.

Here’s the key: You can re-tax your EV early, even before the actual due date. By doing this before 1st April 2025, you’ll secure an additional year of zero-rated VED.

How to Implement the Strategy:

  • Gather your documents: You’ll need your vehicle’s registration number and the V5C logbook.
  • Visit the government’s vehicle tax website: The process is straightforward and can be completed online.
  • Confirm early taxing: The website will prompt you to confirm your intention to tax your vehicle early. Accept the prompt.

Important Considerations:

  • Leased or Company Vehicles: As noted by motoring experts, this strategy may not be applicable to individuals with EVs acquired through leasing or salary sacrifice schemes, as the vehicle taxation is typically handled by the leasing company.
  • Future Costs: Remember that this strategy only delays the £195 annual charge. You will pay the standard VED rate at your next renewal. Also, the expensive car supplement is unavoidable for qualifying new cars.
  • Accurate Records: Maintain accurate records of your vehicle tax payments and renewal dates.

Don’t hesitate to contact us on 01384 376 964 if you have any questions or require further assistance. We’re here to help you navigate the evolving landscape of EV taxation and optimise your financial planning.

Folkes Worton LLP Chartered Accountants
Accounting for the Future