Electric car owners will have to pay taxes from 2025, announces Jeremy Hunt

UK Chancellor Jeremy Hunt, in his Autumn Statement, has announced that electric car owners will have to pay taxes from 2025.

Vehicle Excise Duty is a type of tax charged on all vehicles driven on UK roads. Until now, electric car owners have been exempted from VED, but it is going to change in April 2025.

The AA group says the change could lead to a potential reduction in sales of electric cars. On the other hand, the RAC motoring group is optimistic and believes that the change will not affect sales.



Jeremy Hunt said the OBR (Office for Budget Responsibility) has predicted that half the new vehicles purchased in 2025 will be electric. The change in taxes is done in order to make the tax system fairer.

The chancellor added that electric car taxes will remain lower than fuelled vehicles.
Nicholas Lyes, the head of RAC, said that the decision is fair in order to maintain the roads. The Local Government Association has also welcomed the move.

Even though electric cars are less harmful, they can still damage roads.
Whereas, the AA said the move could lead to a reduction in sales of EVs. This may delay benefits to the environment.

FAQs:

1. Do Electric Car owners pay taxes in the UK?
   As of now they don’t, but they will have to from April 2025.
2. Will Electric Car owners pay the same tax as traditional car owners?
   No, EV owners will pay less tax than traditional car owners.