Campaigners warn VED car tax could have major impact on 'new and used' car owners
New car tax changes set to be introduced next spring have been attacked with the scheme possibly impacting consumers across the board.
Car tax Vehicle Excise Duty (VED) updates set to be introduced from April 2025 could “disincentivise consumers”, according to motoring experts.
FleetPoint, one of the leading voices for company car providers in the UK, stressed that the move to tax electric vehicles from next year could backfire.
The move to tax electric cars from 2025 was first announced by the Chancellor and Treasury back in November 2022.
It means owners of EVs will be forced to pay the standard VED charge every year which currently stands at £190 per annum.
The Expensive Car Supplement exemption will also be removed adding an extra charge on those who purchase brand new vehicles valued at over £40,000.
FleetPoint said: “The new Government needs to create a clearly signposted long-term transport tax road map that sets out how the core transport taxes will evolve with the growth of ZEVs.
“Low benefit-in-kind tax (BiK) rates for BEVs has transformed demand for ZEVs and incentivised drivers to make the transition out of petrol and diesel cars.
“However, BiK is just one of a range of transport taxes. Both Vehicle Excise Duty (VED) and fuel duty play a huge role in the cost of transport.
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“While there is a positive forward vision for BiK, the introduction of VED on ZEVs from 2025 will disincentivise consumers in the new and used market.
“A policy for fuel duty over the life of the next parliament should also be mapped out so that fleets can plan with certainty.”
They are just the latest voice motoring industry calling for the move to be immediately axed with concerns about how it could impact the take-up of electric vehicles.
Last week, the Association of Fleet Professionals (AFP) also called out the concept in their 2024 Tax and Regulation Manifesto.
The AFP explained: “With businesses struggling to electrify vans already, adding to the cost will not be helpful. We would like to see VED kept at zero for electric vans in a move to aid businesses with their transition to eLCVs.”
The Society of Motor Manufacturers and Traders (SMMT) and the AA have also raised their concerns over the new fees.
