Electric vehicle owners could be hit with car tax bills for the first time under plans being considered by the Chancellor ahead of the Autumn Statement.
Jeremy Hunt is reported to be looking at applying vehicle excise duty (VED) to electric cars and vans as part of efforts to plug a £35 billion drop in vehicle-related income. He is expected to confirm the plan as part of a wider package of tax increases and spending cuts in Thursday’s Budget.
A government source told the Telegraph that it was “inevitable” that EVs would be subject to tax at some point and the Treasury was now actively considering when that should be. It is believed that Thursday’s announcement could herald the introduction of VED on electric cars by 2025.
EV owners currently pay no annual car tax and the government previously guaranteed that this would remain the position until 2025. While EVs priced over £40,000 are subject to first-year “premium tax” they are VED exempt after that while new petrol and diesel cars are subject to a £165 per year charge.
