Do electric cars pay road tax?
From April 2020 all zero emissions vehicles, which includes all electric cars, are exempt from both first year and subsequent years’ road tax. There was previously a charge for more expensive cars costing over £40,000 but this has also been scrapped for electric vehicles too.
How Is Road Tax Calculated?
Tax bands for Vehicle Excise Duty (VED) are based on CO2 emissions, so the more harmful the vehicle the higher rate of tax applicable. Currently the zero emissions band attracts zero tax, meaning all electric cars are exempt from VED. To put that in perspective the highest first year rate charge for vehicles with CO2 emissions of 255g/km or over is £2,175, so electric cars can offer seriously significant savings.
What is the difference between the first year and standard rates?
Road tax is split into two different payments, one is the first year charge which is calculated using a vehicle’s CO2 emissions, the second is a flat rate for either conventionally fuelled vehicles, hybrid vehicles or zero emissions vehicles. In the first year a premium car surcharge may also be applicable which is explained below.
The good news is that electric cars are exempt from both first year and standard rates, so if you choose an electric vehicle, there will be no road tax payments included in your monthly charge throughout the length of your contract.
What Is A Premium Car Surcharge?
Cars with a list price of over £40,000 must pay a surcharge on top of their first-year road tax of £325, however from April 2020 all zero emissions vehicles, and therefore all electric cars, are exempt from this payment. This exemption is expected to last until at least March 2025.
Are hybrids exempt from road tax?
Unlike fully electric vehicles, hybrids will pay both a first-year charge based on their emissions and subsequent annual payments. Hybrid vehicles tend to have lower emissions because of their improved efficiency but they will still attract a charge. The table below shows what you would expect to pay. For reference, the Toyota Prius will have emissions of either 94g/km or 104g/km, depending on the model you choose, which would mean a first-year charge of either £125 or £145 respectively.
|
CO2 emissions |
First Year Charge |
|
0g/km |
£0 |
|
1 to 50g/km |
£0 |
|
51 to 75g/km |
£15 |
|
76 to 90g/km |
£100 |
|
91 to 100g/km |
£125 |
|
101 to 110g/km |
£145 |
|
111 to 130g/km |
£165 |
|
131 to 150g/km |
£205 |
|
151 to 170g/km |
£530 |
|
171 to 190g/km |
£860 |
|
191 to 225g/km |
£1,295 |
|
226 to 255g/km |
£1,840 |
|
226 to 255g/km |
£2,165 |
In subsequent years, all hybrid vehicles will be eligible for the ‘Alternatively Fuelled Vehicle’ charge, which is currently £140. Remember that when you lease a vehicle the road tax is included in your monthly charge so you can forget about it, one less thing to worry about!
Models with road tax exemption at Leasing Options
Ready to take the plunge and lease an electric vehicle? Take a look at our latest electric car lease deals, each and every one of them is totally road tax free!
Want to learn more about electric vehicles? Read a comparison of Electric vs Petrol Cars, our Electric Car Charging Connector Guide or a low down on Electric Vehicle Ownership.
