Home Life & Style Experts call for major car tax Vehicle Excise Duty change set to...

Experts call for major car tax Vehicle Excise Duty change set to affect millions

Experts at the AA have called for car tax Vehicle Excise Duty (VED) changes which would see petrol and diesel owners pay more.

Campaigners have suggested those with the keys to electric vehicles should pay less than traditional petrol and diesel cars from next year. EV owners will be charged VED fees for the first time in a major update in April 2025.

However, under current proposals, EV owners will effectively pay the same as low-polluting petrol and diesel cars with only the free Band A set to be scrapped.

From the second year onwards, vehicles will pay the standard £190 rate in line with traditional combustion vehicles.

Meanwhile, those with costly EVs priced over £40,000 will be eligible to pay an extra £400 per year because of the Expensive Car Supplement.

But, the AA feels this rule should change immediately with cheaper tax rates likely to act as an “incentive” to make the transition.

He said: “Rates should only increase in line with inflation and whilst we accept introduction of VED for EVs after 2025, we believe the EV rates should remain lower than for Internal Combustion Engine (ICE) vehicles to act as an incentive.”

Data from the AA shows a staggering 69 percent of road users believe motoring taxes will rise after the General Election.

A total of 89 percent of those polled said they were opposed to any increase in petrol and diesel tax charges anytime soon.

Tax incentives were likely to be a major selling point for many motorists to switch to EVs and news of fees is likely to be met with opposition by electric owners.

Matthew Walters, Head of Consultancy and Customer Value at ALD Automotive | LeasePlan, has previously claimed introducing fees for EVs was “counterproductive”.

He added: “This blanket approach to raising VED creates some unexpected penalties for EV drivers compared to their petrol and diesel counterparts.”

The DVLA has confirmed the change will apply to both new and existing electric vehicles when it is introduced on April 1, 2025.

They defended the price rises and claimed the move “will ensure all drivers begin to pay a fairer tax contribution”. 

Jakob Pfaudler, Chief Executive Officer at the AA, said: “Household finances remain severely squeezed and the impact of the pandemic is still affecting how people live, work and travel.

“Those changes and pressures have been felt acutely by drivers. From the way they power and pay for their cars, to where and how they use them, the cost and complexity of driving has increased.”


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