One day left for electric car owners to save £195 on car tax

Electric vehicle (EV) owners must act today in order to make use of a handy tax trick that can save them up to £195.

Taking action before April 1 will ensure you can get another full year of a car tax exemption. Until now electric vehicle drivers have bene exempt from paying road tax but this changes from tomorrow. However, if you re-tax your vehicle before the change you can delay paying for another 12 months.

Telegraph Money details how motorists can take advantage of the hack and hold off paying tax for another year.

How is electric car tax changing in April 2025?

Owners of EVs have benefited from a Vehicle Excise Duty exemption but this will change on April 1, when charges are brought in.

How much you will have to pay this year depends on when your electric car hit the road for the first time.

• EVs registered before March 31 2017 will pay £20.
• EVs registered between April 1 2017 and March 31 2025 will pay £195.
• EVs registered on or after April 1 2025 will pay £10 in the first year and £195 afterwards.

The rates above take the standard car tax levy into account, not the additional expensive car supplement which will impact the majority of new EVs from April. You can find more detail on this later on.

How to avoid paying EV car tax

Existing EV owners can sidestep this year’s impending bill by re-taxing their car before April 1, prolonging their car tax bill until 2026.

It does not matter if you still have months left on your current year of car tax. Even if you re-taxed your EV in the last week of March, doing it again before April would be a shrewd move.

If you are driving an EV registered after March 31 2017, you will save £195 by making use of this trick.

The best time to re-tax your EV

To avoid paying a fee this year, you must re-tax before April.

The most cost-effective time to do so is at the end of March. This maximises savings as it means you will not have to pay car tax until renewal in March 2026.

John Wilmot, of car leasing site LeaseLoco, said: “While the introduction of VED for electric cars was expected, many drivers may not realise they can in fact delay these charges for another year.

“Taking advantage of this short window to secure another year of tax-free driving is a no-brainer. It’s a simple step.”

How to re-tax your EV and save £195

You likely will not have a tax reminder letter (V11), so to re-tax your car you will need to visit the government website, armed with your vehicle’s registration number and the reference number on your V5C Registration certificate (logbook). Your MOT also needs to be in date in order to successfully re-tax your car.

After entering the digits, a prompt will ask: are you sure? Click “yes” and proceed to renewing your car tax.

This will barely take five minutes but can save you a healthy triple-figure sum.

Why will EV owners have to pay tax?

With more EVs on the roads, it has long been inevitable that the car tax break they have enjoyed would come to an end. The tax changes reflect the Government’s need to offset declining fuel duty revenue brought about by increased EV uptake.

The £195 fee for EVs registered between 2017 and 2025 is the same standard rate that owners of petrol and diesel cars pay.

What is the luxury car tax?

New EVs registered from April 1 will attract an additional levy, known as the expensive car supplement, if they cost more than £40,000. Petrol, diesel and hybrid cars are already liable for this.

The hefty surcharge, which costs £425 a year, is payable annually between the second and sixth years of a car’s lifespan, even if the vehicle’s ownership changes hands.

This comes on top of the standard car tax rate, which is £10 in the first year and £195 afterwards.

For existing owners, the expensive car supplement will not be backdated. So, a driver who buys a car worth more than £40,000 before April will not face the extra levy.

If you have your eyes buying a pricy EV, it would make to finalise the transaction before April 1 in order to avoid the extra tax bill.