Thousands of electric vehicle (EV) owners across the UK are set to receive official letters from the Driver and Vehicle Licensing Agency (DVLA) demanding a new payment of £195. The correspondence, landing on doormats over the coming weeks and months, marks the end of a long-standing exemption for zero-emission cars.
The End of the Exemption: New Road Tax for Electric Cars
For most electric car owners, the new charge represents their first-ever bill for Vehicle Excise Duty (VED), commonly known as road tax. The exemption for EVs was officially scrapped this year, bringing them into the standard taxation system. The standard annual rate for zero-emission cars registered from April 2017 is now £195.
Drivers have the option to pay this amount in one lump sum or spread the cost through instalments. However, many motorists who renewed their vehicle tax shortly before the April deadline, in an effort to delay the new charge, are only now coming up for renewal. This means the DVLA's reminder letters will be the first official notification of the payment for a significant number of EV owners.
Future Charges: Pay-Per-Mile Scheme on the Horizon
The introduction of VED is just the beginning of new financial measures targeting electric vehicle drivers. In her recent Budget announcement, Chancellor Rachel Reeves confirmed a new national pay-per-mile road charging scheme. This system is scheduled to come into force in April 2028.
Under the proposed scheme, EV drivers will be charged based on the distance they travel, at a rate of 3p per mile. For a driver covering the UK average of 8,500 miles per year, this would result in an annual bill of £255. Owners of plug-in hybrid electric vehicles (PHEVs) will also be charged, but at a lower rate of 1.5p per mile.
Why the New Taxes Are Being Introduced
The government has framed these new charges as a necessary response to a significant fiscal challenge. As more motorists switch from petrol and diesel cars to electric alternatives each year, Treasury revenues from traditional fuel duty have been falling steadily. The new taxes are designed to ensure all road users contribute to the upkeep of the UK's transport network, creating a sustainable funding model for the future.
For now, the immediate concern for EV owners is the DVLA letter. Any driver who receives one must ensure the £195 charge is paid promptly to avoid penalties or having their vehicle tax status revoked.
