Do you pay road tax on electric cars?
You might be surprised to learn that electric cars don't have to pay any road tax. That's because the government has decided that zero emissions cars should be exempt from paying. But will they be exempt forever? This guide will tell you everything there is to know about road tax on electric cars.
What is road tax?
Road tax, also known as vehicle excise duty (VED), is a charge that you have to pay when you buy a car. It's based on the CO2 emissions of your vehicle and how much it costs. The more expensive the car, the higher the VED rate will be.
The money raised from road tax goes towards funding services such as police, fire and rescue, education and health care in England, Scotland and Wales. In Northern Ireland it goes towards infrastructure and public transport improvements.
Cars exempt from road tax
There are certain types of vehicles that are exempt from tax. However, ‘exempt’ means that they are free to tax, you still need to register and tax your vehicle even if you don't pay.
These vehicles include those used for disabilities, historical vehicles, vehicles used for agriculture like tractors, and of course, electric vehicles. This is because the amount of road tax you pay is calculated by the emissions it produces. As electric cars produce no emissions, they have no costs.
This is one of the many reasons why owning an electric car can be cheaper than its petrol and diesel counterparts because the running costs are much lower.
Do you pay road tax on hybrid cars?
Although electric vehicles are exempt from road tax, you do have to pay for hybrid vehicles. This is because they use a combination of fuel and their electric motor to power the car which releases CO2 emissions.
However, due to the emissions being much lower than petrol and diesel cars, the road tax costs are slightly discounted. Although, if you have a premium PHEV, then your road tax will be more expensive inline with the monetary value of the vehicle.
Will electric cars remain exempt from road tax?
Currently electric cars are exempt due to their environmental impact, however what will happen when electric vehicles become the norm? Electric cars are already on the rise with over 400,000 electric cars estimated on UK roads in 2022 - and this will only increase.
After the 2030 petrol ban, electric vehicles will become the norm with more people buying brand new electric cars. So can the government afford to not tax these vehicles? It seems unlikely as the payments go towards local services which would not be able to survive the majority of drivers being tax-free. However, they’re have been no announcements as of yet, so watch out closer to the time.
One thing we can assume is that it may be a good idea to buy an electric car sooner rather than later in order to make the most of the cost saving exemptions electric vehicles currently have access to.
Request a brochure now to view our range of MG electric cars and book a test drive today.