UK vehicle tax on EVs

Road tax on electric vehicles

Before 2017, EVs (and range extender models) have always been free from road tax in the UK. However from 1st April 2017, the tax rules changed and vehicles were no longer taxed on CO2 emissions alone and this meant that many EVs registered after this date, now have to pay road tax.

EVs registered on or after 1st April 2017 will pay road tax if the list price is over £40,000 and range extenders now also pay too. The annual tax rates are:

  • Pure EV under £39,999 - £0
  • Pure EV over £40,000 - First year £0, second year to sixth year £320, seventh year onward £0
  • Range extender under £39,999 - Every year £135
  • Range extender over £40,000 - First year £135, second year to sixth year £455, seventh year onward £135

EV registered before 1st April 2017 are (currently) still exempt from road tax.

For more information, see GOV vehicle tax rates.

Be careful of options and extras

If buying a used EV registered after 1st April 2017, you have to work out the list price when it was new to see if it falls above this £40,000 threshold. This list price is the new price of the car, before the government incentives at the time, plus all the extras fitted. Often the extras, such as metallic paint, trim , safety kit, technology etc, can come to a considerable amount and put the list price over the threshold. So you may find that two similar vehicles, but one with extras like a panoramic roof fitted and that vehicle may be liable to road tax, yet the other lesser spec one isn't.

Obviously, premium EVs like Tesla Model S & X, Jaguar i-Pace, Audi E-Tron, Mercedes ECQ are all well over £40,000 new, so will incur road tax charges. But other models like the BMW i3 or Tesla Model 3 can be below the threshold, so you have to be careful when buying used and make sure you know its original list price when it was new.

The BMW i3 is one that you have to watch the cost of the extras fitted. For example, a 2017 BMW i3 94Ah REX had a list price of £34,960. Nearly all i3s will have some extras fitted. If the car had:

  • Metallic paint £530
  • Pro navigation £960
  • Sport pack £1,700
  • Leather interior (Suite world) £2,000

....the list price of this vehicle is £40,150 and therefore pays £455 road tax!

You also have to watch the i3S model, as this was £2,490 more than the standard i3 BEV and like the example above, adding just one or two extras can tip it into the tax band.

The Tesla Model 3 is also another to watch. Most models are well above the £40,000 threshold anyway. However, the base model 'Standard Range Plus' in standard paint without any extras is currently (in Dec 2019) £39,490 and therefore not taxed. Add a different colour paint or any extras, then it will cost £320 a year to tax from it's first anniversary. I believe when the Model 3 first came to the UK, they were all over £40,000 too, and the price of the base model dropped a a month or so later. So you have to be careful and look at the original list price of the model you are buying.

So how do I find the original list price?

This is where it gets very difficult. The DVLA must record the original list price of every vehicle to know whether it falls within these tax bands, but this information isn't public. You can use the GOV tax calculator, but this is only a guide and doesn't account for the differences in the original list prices, so is pretty useless for vehicles that could fall either way of the £40,000 threshold.

The only way I have come up with so far is to find the original price list of the vehicle. After a bit of searching on Google, you should find the UK brochure or price list of the vehicle for that model year. Then you need to add up the cost of all the extras fitted to the vehicle. Remember the metallic paint too.

You can also use a VIN decoder to get the specifications of the vehicle you're looking at buying. For BMWs, try mdecoder.com. This will then show you all the extras fitted to that vehicle. Then use the price list to decide which are applicable and not standard fit for the UK market models and add up their list prices.

Changes following the March 2020 Budget

In the budget on 11th March 2020, the Chancellor announced the removal of Vehicle Excise Duty (VED) for zero-emission cars with a list price exceeding £40,000, starting from April 2020.

Last updated 11/03/2020