‘I’m a car expert – the Autumn Statement could slap drivers with a £600 bill’
A leading motoring expert has warned Jeremy Hunt’s latest Autumn Statement could see some drivers hit with a staggering £600 car tax bill.
Alfonso Martinez, the UK Managing Director of ALD Automotive | LeasePlan, has called out Mr Hunt for delivering a lack of support for electric car owners and changing existing car tax rules.
He suggested this would come to a head in just over 18 months when rules changes could see costs surge.
Electric car drivers currently pay zero road tax as a major incentive to switch to the new machines.
However, this will change in April 2025 when road users will pay annual rates on their EV models in the same way petrol and diesel owners currently do.
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This has the potential to see electric car adopters slapped with massive fees with most models higher than a £40,000 threshold.
Mr Martinez said: “After almost 20 years of governments debating road pricing as an alternative to Vehicle Excise Duty (or ‘road tax’), the Chancellor ruled out any near-future changes to the current system in March.
“Unfortunately, incoming reforms to the VED system are set to add a significant tax burden for electric vehicle drivers from April 2025.
“As it stands, the VED exemption for electric cars (and discounts for hybrids) will end on April 1, 2025.
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“This means all vehicles registered since April 2017 will pay the same annual tax rate, while the Expensive Car Supplement – an additional charge for the first five yearly renewals – will apply to new registrations with a list price of £40,000 or more.
“Electric vehicle prices are falling, but plenty of new models are still over the £40,000 threshold – including the UK’s best-selling EV, the Tesla Model Y.
“As rates rise with inflation, this system will leave drivers with a tax bill of around £600 per year for an electric vehicle, or three times more than the petrol or diesel equivalent.
“The Chancellor should consider adjusting the threshold to account for the still-higher price of EVs or exempting them altogether.”
In the Autumn Statement, the Government has pledged to back “strategic manufacturing sectors” with around £2million worth of zero-emission investments.
The Treasury has also vowed to look into removing unnecessary planning constraints by accelerating the expansion of electric vehicle charging infrastructure.
Meanwhile, Mr Martinez also called out officials for failing to make further tax changes.
He added: “It’s also worth noticing that, five years after it launched its consultation, the Government has yet to reform the VED system for vans.”
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