To Tax or Not to Tax, that is the Question.

23 June 2023

Since the founding of EVs, they have been exempt from VED (vehicle excise licence)

Chancellor Jeremy Hunt announced that electric vehicles will no longer be exempt from vehicle excise duty from 2025.

In the Autumn Statement 2022, the government stated that the electric car VED change will be made to ensure a fairer car road tax system with no exemption or reduction for having an electric vehicle.

Mr Hunt recently said to the Commons that electric vehicles will no longer be exempt from VED from 2025 to fill the holes in the UK’s finance.

The Office for Budget Responsibility gave Mr Hunt the nod that half of all new vehicles registered in 2025 will be electric.

Could this plug up a deficit, thought Mr Hunt?

The answer seems to be yes.

To confuse matters further, a think tank, The Centre of Policy Studies, has called for a ‘major overhaul’ of the UK’s motoring taxation system, introducing a pay-as-you-drive charge.

The think tank feels drivers should be taxed by the mile to fill the £25 billion black hole from lost fuel duty when electric cars take over the roads.

It’s been claimed that EVs produce more pollution from brakes and tyres due to the additional weight of the batteries than those on the petrol and diesel cars they are replacing.

Another opportunity for Mr Hunt?