'Significant portion' of British drivers to be 'punished' by new £410 car tax hike
Motorists will be affected by new Vehicle Excise Duty (VED) car tax fees with major changes coming next Spring.
Millions of motorists are set to be “punished” as a result of new Vehicle Excise Duty (VED) car tax changes introduced within months.
Electric car owners will be forced to pay VED from April 2025 with motorists who own expensive vehicles also liable for the so-called “luxury car tax” fee.
The rule means any motorist owning a vehicle over £40,000 will have to pay an extra £410 per year.
However, the high price tag of electric models means almost all EV owners will be caught out by the extra fee.
Currently, a whopping 31 percent of motorists are currently caught out by the ‘luxury’ charge.
But, this could rise to 70 percent of electric models in a blow to those making the transition.
Extra fees will be paid on top of the £190 VED charge from next April meaning certain road users will pay £600 to use the roads.
Mike Hawes, the President of the Society of Motor Manufacturers and Traders (SMMT) warned a “significant proportion” of electric car owners will feel the sting.
He called out the new charge and suggested drivers were being “punished” for making the environmentally friendly choice.
Speaking to AutoExpress, Mike said: “Next year’s planned changes to extend the VED expensive car supplement to EVs will see a significant portion of these zero-emission vehicles classed as ‘luxuries’, right when manufacturers are mandated by law to increase the proportion they sell.
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“We need a fairer tax system that encourages drivers to make the switch, instead of punishing them with a tax bill for fulfilling the green goals shared by government, industry and society.”
It’s not just those buying new electric models who will be affected as the luxury car tax charge also impacts used owners.
Motorists have to pay the fee for up to five years after a vehicle has first been registered which will ensure motorists will pay £2,000 over half a decade.
Auto Express Editor Paul Barker warned many EV owners will be completely unaware of the extra charge until they tax their vehicle.
The motoring expert suggested the demand for electric models was not yet strong enough for officials to be charging more.
Paul commented: “Private and used vehicle uptake of EVs is not yet in a position to start adding cost barriers; more needs to be done to encourage drivers to move to this still-fledgling technology, not give another reason to hold off from making the shift.”
