What taxes apply to electric vehicles and when will new petrol and diesel cars be banned?

Katy AustinTransport correspondent Getty ImagesA new tax for drivers of electrical autos (EVs) might be introduced by Chancellor Rachel Reeves in her 26 November Finances.”Gas responsibility covers petrol and diesel, however there is not any equal for electrical autos,” a authorities spokesperson informed the BBC. “We would like a fairer system for all drivers.”All new vehicles should be electrical or hybrid from 2030, when a ban on the sale of recent petrol and diesel vehicles comes into drive.Why are new petrol and diesel vehicles being banned?The transfer is a part of UK authorities efforts to fulfill a legally binding purpose of reaching “internet zero” by 2050. Meaning not emitting extra greenhouse gases than are faraway from the environment.Home transport – together with vehicles, buses and trains – was chargeable for greater than 1 / 4 of emissions in 2023, making it the most important emitting sector.Ministers have dedicated to banning the sale of recent petrol and diesel vehicles in 2030.Meaning all new vehicles should be electrical, or hybrid – with each an inside combustion engine and electrical motor.UK drivers will be capable to purchase new hybrids till 2035.The EU will not ban gross sales of recent fossil fuel-powered vehicles till 2035.What taxes apply to electrical autos?There is no such thing as a electrical automobile equal of the gas responsibility paid by drivers of petrol and diesel vehicles.However on 1 April 2025, Automobile Excise Responsibility grew to become payable on EVs for the primary time.For brand new vehicles, the fee within the first 12 months is £10, rising to the usual price of £195 within the second 12 months. These registered between April 2017 and March 2025 pay £195 from the beginning.Electrical vehicles registered after that date and costing greater than £40,000 are additionally topic to the “luxurious automotive tax” of £425 per 12 months. That is payable for 5 years from the second time the automobile is taxed.Forward of the Finances, the Treasury has reportedly been weighing up whether or not to seek the advice of on a “pay-per-mile” tax on EVs from 2028. The Telegraph reported that EV drivers might be charged 3p per mile, on high of different street taxes, amounting to an additional £12 on a journey from London to Edinburgh.It’s unclear how such a scheme could be enforced, with experiences that motorists would pay in line with their very own estimate of how a lot they anticipated to drive.The AA stated the federal government wanted to “tread rigorously” to keep away from slowing down the transition to EVs. Ford stated taxes on electrical autos could put drivers off shopping for them at a time when demand has “misplaced momentum”.In London, drivers of electrical autos should pay the congestion cost from 2026.What number of electrical vehicles are on UK roads?UK gross sales of recent absolutely electrical vehicles have been rising steadily.The quantity registered rose from 29,800 in October 2024 to 36,800 in October 2025, automotive trade commerce affiliation the SMMT stated. The determine was equal to 1 / 4 of recent automotive registrations. The aim is to extend this to 80% by 2030.The second hand market can be rising, however from a low base. SMMT knowledge exhibits that about 80,600 used electrical vehicles had been bought between July and September. That is 4% of second hand gross sales.Evaluation by ZapMap, an electrical charger mapper and knowledge supplier, means that there at the moment are at the least 1.7 million absolutely electrical vehicles on UK roads, about 5 per cent of the overall.Automobiles with combustion engines nonetheless make up the overwhelming majority of vehicles and other people will nonetheless be capable to drive them after 2035.How a lot do electrical vehicles price to purchase and run?The federal government just lately introduced a subsidy scheme for brand spanking new EVs. Grants can be found of as much as £3,750 for eligible fashions priced at £37,000 or beneath. It’s hoped the scheme will make it simpler for individuals to change to electrical.The AA stated drivers “regularly inform us that the upfront prices of recent EVs are a stumbling block to creating the swap to electrical”.For second hand vehicles, on-line market Autotrader says it is “seeing loads of examples the place electrical vehicles are the identical value or decrease than comparable petrol fashions, particularly within the three to five-year age group”.As well as, about 680,800 electrical vehicles at the moment are being leased, the British Automobile and Leasing Affiliation (BVRLA) stated. That is almost half of all leases.In the case of working prices, electrical charging may be cheaper than petrol or diesel. Nevertheless it relies upon the place you cost.Charging at dwelling – for individuals who have the choice – is considerably cheaper, particularly on an off-peak tariff. Residence charging qualifies for the 5% price of VAT on home vitality, in comparison with the usual price of 20% for public charging.Costs can differ rather a lot when utilizing public cost factors, relying on components together with the pace of the charger and the time of day. Sure apps supply discounted charging charges.The quickest, “Extremely-rapid” charging on the general public community could even work out as costlier per mile than fossil fuels.Motoring teams say electrical vehicles are usually cheaper to keep up.Is there sufficient charging infrastructure?The vary of electrical vehicles has improved, as has the variety of public cost factors. However considerations stay about having sufficient of them across the nation.Knowledge from Zapmap exhibits nearly 87,000 throughout the UK, in about 44,000 places. These embrace locations like grocery store automotive parks and lamppost chargers. In March, a report by the Public Accounts Committee of MPs stated availability on motorways was nonetheless “patchy”.It stated the federal government was on observe to achieve the minimal 300,000 factors wanted by 2030. Nonetheless, it added that “too few have been put in outdoors of the South East and London, which presently host 43% of all cost factors”.The report additionally raised “considerations across the impression on drivers with disabilities, these with out entry to off avenue parking and deprived teams”.