Chancellor Rachel Reeves is launching a tax raid on some drivers that could cost them over £2,000, according to reports. Drivers of certain popular models will be hit with the increased bills from April 1.
Specifically, the Expensive Car Supplement will impact millions of electric vehicle owners as part of big reforms to Vehicle Excise Duty (VED), unveiled by Ms Reeves last year. Electric vehicles were previously exempt from the duty, which applies to cars worth more than £40,000. But, owners of these vehicles will now have to pay an additional £425 supplement for five years from the second licence period.
Jon Lawes, Managing Director at Novuna Vehicle Solutions, told GB News said: “Despite the fact they will no longer be exempt from VED from April, EVs still remain a very attractive option under salary sacrifice schemes, thanks to far lower Benefit-In-Kind rates than hybrid and ICE vehicles.
“Although EVs may have a higher upfront cost than their counterparts, the continuing downward trend of the cost of EVs will help absorb the VED increase.”
The expert warns the new duty for electric vehicle owners will cost them £2,125 over five years.
It appears many are trying to avoid this new tax. Sales of electric cars have surged in recent months as some drivers look to different vehicles.
Sales of electric vehicles (EVs) were up 41.7%in February , according to the Society of Motor Manufacturers and Traders (SMMT).
They added: “Relative to the rest of the market, EVs are disproportionately affected, as higher production costs mean the average EV retails above the [tax] threshold, which remains unchanged since its introduction in 2017.
“The introduction of this measure also risks disincentivising the used market as well as the new, impeding a faster, fairer transition.”
