In the Autumn 2022 budget, the Government unveiled new legislation to electric vehicle road taxation, namely Vehicle Excise Duty (VED), and adjusted expensive car supplement exclusions. This means the way in which road tax and expensive car supplements for leased EVs is changing.
Understanding the changes to EV road tax
EV Road Tax
From 1 April 2017, all electric cars and vans will be subject to the lowest rate of tax at the first-year rate, currently set at £10. The standard road tax rate will apply from the second year onward, increasing to £180 annually for cars and £320 for light commercial vehicles.
Furthermore, an expensive car supplement will be levied on EVs exceeding £40,000 at first registration from 1 April 2025, resulting in an additional rate of £390 per year for five years, commencing from the second license year through the sixth of leasing.
Road tax for new EV quotes
From March 2024, quotes will incorporate the standard rate of road tax for EVs, approximating an increase of £10 per month over a three-year contract.
For EVs surpassing £40,000 in list price, the cost of the expensive car supplement will be factored into quotes from early 2025, adding approximately £21.66 a month for a three-year contract, in addition to the standard rate of EV road tax.
Road tax for leased EVs
From 1 April 2025, road tax not included in the EV lease rate will be invoiced separately on the vehicle’s registration anniversary at the applicable rate. In cases where road tax is covered in the lease, any increases will trigger an additional invoice.
It’s important to note that the expensive car supplement is not applicable to electric vehicles registered before 1 April 2025.
The evolving landscape of EV taxation and the importance of staying informed to navigate these adjustments seamlessly.
At AMT Auto, we’re committed to keeping our customers up-to-date with the latest developments in EV taxation to help you make informed decisions on your lease. Contact the team today to discuss how to lease an EV or if you’re considering the upgrade to an EV, sell your car with us for the best price.