Anyone looking to drive a new electric car will want to know how much tax they’ll have to pay on it. If the electric car you choose to drive is a fully-electric car (one powered only by electric battery power) you will pay no vehicle excise duty (VED) in the 2022/2023 tax year - not one penny. . .
How Much Tax Do You Pay On Electric Cars?
The amount of tax you pay will depend on the vehicle. If your electric vehicle is a battery-electric vehicle (BEV, i.e. a vehicle that only uses electric power to drive) then you will pay no VED tax.
However, if your vehicle is a hybrid electric vehicle of any type, you will pay tax - although how much depends on when the vehicle was registered - more on that below.
How Do You Tax An Electric Car?
To tax your electric vehicle - you still have to apply for tax, even though you won’t pay anything on a BEV vehicle - go to a Post Office or to the gov.uk website. Make sure you have your reference number from your vehicle log book (V5C document) or the ‘new keeper’ green paper slip you get when you buy a vehicle. Enter your details and you’re done.
How Much Does It Cost To Tax A Hybrid Car?
Paying VED on a hybrid car depends on the year that the vehicle was registered and how much CO2 emissions it pumps out. Here’s how it breaks down:
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Any hybrid car registered between 1st March 2001 and 31st March 2017 that outputs CO2 emissions of less than 100g/km pay nothing and are exempt from paying VED.
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Any hybrid car registered after 1st April 2017 is subject to new rules brought in on that date - a new first-year rate and new rates for those years that follow.
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The big difference is that if your hybrid car costs more than £40,000 you’re going to have to pay an EXTRA £335 per year, and will have to pay this rate for 5 years further from the second year you tax the vehicle.
For a pure electric car - this is how your tax works out:
| Band and CO2 emission | Single 12 month payment | Single 12 month payment by Direct Debit | Total of 12 monthly instalments by Direct Debit | Single 6 month payment | Single 6 month payment by Direct Debit |
| A: Up to 100g/km | £0 | £0 | N/A | N/A | N/A |
For hybrid vehicles registered between 1/3/01 and 31/3/17 - this is how your tax would work out:
| Band and CO2 emission | Single 12 month payment | Single 12 month payment by Direct Debit | Total of 12 monthly instalments by Direct Debit | Single 6 month payment | Single 6 month payment by Direct Debit |
| A: Up to 100g/km | £0 | £0 | N/A | N/A | N/A |
| B: 101 to 110g/km | £10 | £10 | £10.50 | N/A | N/A |
| C: 111 to 120g/km | £20 | £20 | £21 | N/A | N/A |
| D: 121 to 130g/km | £125 | £125 | £131.25 | £68.75 | £65.63 |
| E: 131 to 140g/km | £155 | £155 | £162.75 | £85.25 | £81.38 |
| F: 141 to 150g/km | £170 | £170 | £178.50 | £93.50 | £89.25 |
| G: 151 to 165g/km | £220 | £220 | £231.00 | £121.00 | £115.50 |
| H: 166 to 175g/km | £255 | £255 | £267.75 | £140.25 | £133.88 |
| I: 176 to 185g/km | £280 | £280 | £294 | £154 | £147 |
| J: 186 to 200g/km | £320 | £320 | £336 | £176 | £168 |
| K*: 201 to 225g/km | £350 | £350 | £367.50 | £192.50 | £183.75 |
| L: 226 to 255g/km | £605 | £605 | £635.25 | £332.75 | £317.63 |
| M: Over 255g/km | £620 | £620 | £651 | £341 | £325.50 |
When you consider the prices above, this is why leasing a hybrid vehicle could be considered the smarter way to spend your money - the tax is paid as part of your stated monthly payments, it’s not an extra cost you have to make on top of your lease payments.
Will Electric Car Drivers Ever Have To Pay Tax?
Considering the Government’s 2030 deadline that will end the sale of solely petrol or diesel-powered cars, and the estimated £35b shortfall in tax this will result in, electric cars will very likely end up paying VED tax at some point.
Are There Incentives For Driving An Electric Car?
Right now, the main incentives are not paying any VED or fuel duty (currently 52.9 pence per litre) and a Government grant that knocks £1,500 off the price of an electric car that costs less than £32,000.
There used to be an up to £350 grant to go towards the installation of a home chargepoint, but this has since been withdrawn - that’s why Vanarama decided to just offer them for free with every electric car lease.
