Ongoing issues at home and abroad, including the knock-on effects of COVID-19 and the energy crisis, have both resulted in some modifications in regard to taxes. Some of these are directly related to motor vehicles. Let us take a quick look at how these changes are set to impact the average driver in the near future.
Excise Duties on Electric Vehicles
Beginning in April 2025, all electric vehicles will be required to pay a vehicle excise duty (VED). This is similar to the taxes associated with petrol- and diesel-powered units. This will equate to the lowest tax level (£10 pounds) for the first year of registration. Charges will thereafter increase to the standard rate of £165 pounds per year. Note that zero-emission vehicles registered between April 2017 and March 2025 will be liable to pay this standard rate (1). It should also be mentioned that specific vehicles (such as hybrids and tricycles) may be subject to different rates.
Company Car Tax Rates
CCT rates have likewise been slightly modified. All changes will remain valid between now and the year 2028. One of the main purposes is to provide additional economic incentives to purchase electric vehicles (EVs). The charges themselves will be adjusted in relation to the carbon emissions of the vehicles themselves. Here is a rough breakdown (1):
- Rates will increase by one per cent each year for vehicles emitting less than 75 grams of carbon dioxide per kilometre.
- These rates will therefore rise by a maximum of five per cent for owners of electric vehicles. Standard cars associated with ultra-low emissions may nonetheless witness rate hikes by as much as 21 per cent.
Fuel Benefit Charges
Recent legislative changes have also slightly modified the fuel benefit charges associated with cars and vans. Future information is set to be released in December 2022 and any increases will correlate with the CPI (consumer prices index).
It can still be a good deal to upgrade to an electric vehicle. If you are considering selling your car or should you wish to obtain a no-obligation valuation, please enter your registration number or contact the team at Sell My Car Essex. We will provide the help that you have been looking for.
Note: this article is based on our understanding at the time. Always consult official sources before making decisions.
Article sources:
1. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1118417/CCS1022065440-001_SECURE_HMT_Autumn_Statement_November_2022_Web_accessible__1_.pdf
