Electric vehicle (EV) owners have long enjoyed the benefit of EV road tax exemption, but this perk is set to end in April 2025. Martin Lewis’ Money Saving Expert (MSE) team has uncovered a smart strategy that could help electric vehicle owners extend their road tax-free period for an additional year – BUT TIME IS RUNNING OUT! Here’s how it works and how you can benefit.
The Electric Vehicle Road Tax Exemption: What’s Changing?
Currently, electric vehicles are exempt from paying road tax (vehicle excise duty). However, as of April 2025, this exemption will come to an end. From that point onward, owners of EVs will have to pay road tax based on when their vehicle was first registered. Here’s the breakdown of the new rates:
Before March 31, 2017: £20 per year (2025/26 rates).
April 1, 2017 – March 31, 2025: £195 per year (2025/26 rates).
After April 1, 2025: £10 for the first year, then £195 per year (2025/26 rates).
For new electric vehicles purchased at £40,000 or more and registered on or after April 1, 2025, there will be an additional expensive-car supplement of £410 per year, which will be added to the standard road tax from the second year onwards. For example, a new electric car priced at £45,000 would cost £10 in road tax for the first year and £595 (£195 + £410) per year from the second year to the sixth year.
How to Delay Your First Road Tax Payment
If your electric vehicle was registered on or after April 1, 2017, you can avoid paying road tax until March 2026 by renewing your road tax in March 2025. This simple trick allows you to push back your first tax payment, saving you money for an extra year.
The process is straightforward. You can re-tax your vehicle online using your car’s registration number and the reference number from your V5C registration certificate (logbook) in your name. You can do this any time before April 1, 2025, but doing it in March will maximise your savings. Even if your current road tax expires before this date, the re- taxing process will extend your exemption period by delaying payment until March 2026.
Additional Considerations for Expensive EVs
It’s important to note that electric vehicles with a purchase price of £40,000 or more will be subject to an additional expensive-car tax, which costs £410 per year for five years, starting from the second year of registration. This supplement applies to both electric vehicles and plug-in hybrids, so be sure to factor this into your budgeting if your EV falls into this category.
For plug-in hybrids, the road tax rates are generally lower than for conventional petrol or diesel vehicles, but the expensive-car tax applies if the vehicle was registered after April 1, 2017 and cost £40,000 or more.
Why Re-Tax in March 2025?
By renewing your road tax in March 2025, you can take full advantage of this electric car tax loophole and extend your exemption until 2026. It’s a simple step that could save you money, and the entire process can be done online in just a few minutes. The Government website will prompt you with a confirmation message like “Are you sure?” – just confirm, and you’re all set.
Will You Use This EV Road Tax Trick?
With the upcoming changes to electric vehicle road tax, it’s more important than ever to stay on top of your vehicle’s tax status. Martin Lewis’ money-saving tip gives you the opportunity to delay your first payment, helping you manage your finances more effectively.
What do you think about the upcoming EV road tax changes? Will you use this strategy to push back your payments?
