Electric vehicle road tax rates and costs.

[Haywain]

Petrol is a major tax generator, yet they are trying to push us all towards less taxed electric cars.

mods note - split from this thread

Apparently, I was wrong yesterday to suggest that electric vehicles are subject to lower taxes - see post #64. The fact is that those lower taxes from cars will need to be replaced to maintain both the infrastructure and a green agenda.

 

[Buzby]

Petrol is a major tax generator, yet they are trying to push us all towards less taxed electric cars.

As I noted earlier, EV’s enjoyed a ‘sunrise‘ period of no (or very low) tax, along with eye-watering financial incentives and rebates which I made use of (along with free recharging and at most times, free parking) all of these have been steadily whittled away by the Tory Govt. EV’s most certainly are not ‘new technology as I bought my first one in 2009 (15 years ago), but the benefits that attracted me then are long gone.

Private firms anxious to jump on the bandwagon are offering recharge hubs, with the price of doing so costing X4 what you’d pay at home, and even higher at some locations. For those without their own domestic charger running an EV will cost more than a petrol equivalent, so far from being ‘pushed’ by Govt to adopt them, it is the opposite - vehicle manufacturers are doing it but only to dispose of inventory that is quietly depreciating in compounds around the country.

incidentally charging at home has a 5% VAT rate, but a public site has to charge 20%

 

[Haywain]

As I noted earlier, EV’s enjoyed a ‘sunrise‘ period of no (or very low) tax, along with eye-watering financial incentives and rebates which I made use of (along with free recharging and at most times, free parking) all of these have been steadily whittled away by the Tory Govt. EV’s most certainly are not ‘new technology as bought my first one in 2009 (15 years ago), but the benefits that attracted me then are long gone.

Private firms anxious to jump on the bandwagon are offering recharge hubs, with the price of doing so costing X4 what you’d pay at home, and even higher at some locations. For those without their own domestic charger running an EV will cost more than a petrol equivalent, so far from being ‘pushed’ by Govt to adopt them, it is the opposite - vehicle manufacturers are doing it but only to dispose of inventory that is quietly depreciating in compounds around the country.

You seem to be conflating costs with taxes - the cost of 'fuel' is not a tax.

 

[Buzby]

You seem to be conflating costs with taxes - the cost of 'fuel' is not a tax.

80% of the cost of ‘fuel’ is taxed (twice, actually) for the refined stuff. For electricity, the cost is directly related to where you charge up - if your own solar, it’s free. Home charger 5% or public chargepoints 20%. Everyone is aware that Road Tax funds everything except roads but EVs were exempt. Now, the costs are being loaded on to previously exempt vehicles. Hardy the promotion of green policies.

 

[takno]

You seem to be conflating costs with taxes - the cost of 'fuel' is not a tax.

A huge proportion of the cost of electricity is the green levy, which supports renewable generation. This is effectively a tax.

Whilst in principle this isn't a bad thing, since it's helping to fund a much more rapid transition than might otherwise happen, it makes electricity so expensive that it is preventing transitions to EVs and domestic heat pumps.

 

[Adam Williams]

A huge proportion of the cost of electricity is the green levy, which supports renewable generation. This is effectively a tax.

Whilst in principle this isn't a bad thing, since it's helping to fund a much more rapid transition than might otherwise happen, it makes electricity so expensive that it is preventing transitions to EVs and domestic heat pumps.

Entirely agree with this.

I find it bizarre that it's levied on electricity, and not gas (which is a) inherently non-renewable and b) produces carbon dioxide when it's burnt)

 

[redreni]

80% of the cost of ‘fuel’ is taxed (twice, actually) for the refined stuff. For electricity, the cost is directly related to where you charge up - if your own solar, it’s free. Home charger 5% or public chargepoints 20%. Everyone is aware that Road Tax funds everything except roads but EVs were exempt. Now, the costs are being loaded on to previously exempt vehicles. Hardy the promotion of green policies.

Indeed, but taxing the electricity at the domestic rate when the vehicle is charged at home is something of an accident, because use of electricity for EV charging at home can't be metered separately from things like cooking and heating.

I can see why EV owners are annoyed at some of the tax breaks being lessened, because the tax breaks are needed to compensate for the enormous up-front cost of the vehicle, but the reality is as people switch from petrol or diesel to EVs the government is losing an enormous amount of tax revenue on the energy people use to drive around.

 

[Buzby]

The prospect of charging EV’s ‘correctly’ at the 20% VAT rate was actually a very real prospect 8 years ago. It was suggested that the imposition of ‘smart meters’ would solve this dilemma by having a seperately wired circuit where the tax could be accurately imposed (indeed, the very reason why I still refuse to accept a smart meter to this day). Even the 5% tax can be mitigated by two wheezes - (1) Being on a off-peak (white) meter and charging overnight, with the resultant cost (and tax) reduced by 50%. (2) Solar Panel users can avoid paying any VAT by charging whilst the sun shines. Since my FIT payments (Feed In Tariff) are unaffected - I got paid whether I exported the power or used it myself this was the icing on the cake.

Around the same time, said Govt was also looking a a Road Pricing model where fuel became tax free but all vehicles paid per mile of road use, capped at some nominal level (like the gas/electric Standing Charge) I wonder why they gave up?

 

[JamesT]

Entirely agree with this.

I find it bizarre that it's levied on electricity, and not gas (which is a) inherently non-renewable and b) produces carbon dioxide when it's burnt)

Because politically making it more expensive to have the lights on is less damaging than people not being able to heat their homes. Also, everyone uses electricity so it was deemed fairer that everyone shares the costs of moving to renewables.

 

[Bald Rick]

80% of the cost of ‘fuel’ is taxed (twice, actually) for the refined stuff.

It’s actually only about 50% (eg 52% tax and duty on a fuel price of 150p / litre).

I do wonder if the new Govt will reverse the ‘temporary’ 5p fuel duty cut in the autumn budget, and then lift it some more the following year. It’s a fairly obvious thing to do early in a term.

 

[jon0844]

The second band of VED (after £0) is £10 per year isn't it? Do we know where EVs will fit, and what the criteria will be given they are all zero emission.

Long term, I think the most logical way to charge is based on miles per kWh (i.e. the efficiency of the motor) which will reward people who buy a Dacia Spring with a 28kWh battery and weighing under 1000Kg vs some mad SUV with a 110kWh battery that weighs the same as a cruise ship and does 2-3 miles per kWh best case.

I know a lot of anti-EV petrolheads are boasting how EVs are about to be taxed, thus there's no point buying one but VED has always been banded and it's clear an EV won't cost as much as most ICE cars (certainly the ones petrolheads want to keep, as I doubt they're championing 1ltr 3-cylinder petrol engine cars).

 

[JamesT]

The second band of VED (after £0) is £10 per year isn't it? Do we know where EVs will fit, and what the criteria will be given they are all zero emission.

Long term, I think the most logical way to charge is based on miles per kWh (i.e. the efficiency of the motor) which will reward people who buy a Dacia Spring with a 28kWh battery and weighing under 1000Kg vs some mad SUV with a 110kWh battery that weighs the same as a cruise ship and does 2-3 miles per kWh best case.

I know a lot of anti-EV petrolheads are boasting how EVs are about to be taxed, thus there's no point buying one but VED has always been banded and it's clear an EV won't cost as much as most ICE cars (certainly the ones petrolheads want to keep, as I doubt they're championing 1ltr 3-cylinder petrol engine cars).

Assuming we’re talking about new cars here, the system was simplified in 2017 into three bands, zero, standard, premium. There’s a CO2-based rate for the first year, but after that it’s £190/year at the standard rate.

 

[jon0844]

I expect it will have to be redesigned for EVs because clearly it wouldn't be fair or logical to charge the same for all types of EV simply because they're zero emissions. I would go for motor efficiency, but I suppose you could also look at other factors like weight, or WLTP?

 

[Krokodil]

Weight would be a good measure. An escalating scale for each tonne a vehicle weighs would penalise those who do the most wear on the roads.

 

[Bikeman78]

mods note - split from this thread

Apparently, I was wrong yesterday to suggest that electric vehicles are subject to lower taxes - see post #64. The fact is that those lower taxes from cars will need to be replaced to maintain both the infrastructure and a green agenda.

My diesel only costs 30 quid a year to tax. Even if electric cars are zero (are they still?) that is hardly any incentive for me to switch. My plan is to keep it going until a costly repair is required.

 

[jon0844]

My diesel only costs 30 quid a year to tax. Even if electric cars are zero (are they still?) that is hardly any incentive for me to switch. My plan is to keep it going until a costly repair is required.

They're zero for now, but that is going to change.

 

[Harpers Tate]

I believe rates for all car types are set to change, including old low CO2 diesels.