Autumn 2022 Budget: Impact on New Vehicles & EVs 🚗
As part of the Autumn 2022 budget, Jeremy Hunt announces changes to vehicle tax rules, meaning EV’s are taxable from 2025. How will this impact you and how much more will EV drivers have to pay?
Amongst a raft of measures, Chancellor Jeremy Hunt announced that EV vehicles registered after April 2025 would be subject to tax for the first time.
The New Tax Measures
Owners of new EVs can expect to pay £10 for the first year, then the standard rate of tax for each year after. Currently, the standard vehicle tax rate is £165.
Additionally, any EVs registered since 2017 will be subject to the standard rate.
The head of the RAC, Nicholas Lyes, welcomed the move, saying
“After many years of paying no car tax at all, it’s probably fair the government gets owners of electric vehicles to start contributing to the upkeep of major roads from 2025.
“Vehicle excise duty rates are unlikely to be a defining reason for vehicle choice…”BBC News
Expensive Car Supplement
Historically, EVs have been exempt from the expensive car supplement, but no longer.
Drivers purchasing a new vehicle costing over £40,000, electric or not, will be hit with a £355 expensive car supplement payment every year from the second to the sixth year of registration.
Coupled with new taxation rules, drivers of a new top-end EV can expect to pay an extra £520 per year.
What do you think?
Will the new announcements factor into your decision to go electric?
The head of the AA thinks so, warning that the move could “dim the light” on the EV market, and goes against the government’s ambitious Net-Zero plans.
Industry leaders believe the future of the car market is electric and hybrid, with 1 in 5 cars sold in 2022 being one of the two, with the figure expected to rise year on year.
To support this rise, we need better infrastructure and an improvement in our roads. This new tax hike should provide some much-needed funding to do so.
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