Hundreds of thousands of UK electric vehicle (EV) drivers have legally sidestepped a new £195 annual road tax by exploiting an early renewal loophole with the DVLA.
The Great EV Tax Rush
In a surge of activity ahead of an April deadline, more than 300,000 electric car owners rushed to renew their vehicle registrations early. This strategic move allowed them to secure another full year of tax-free driving, just before new Vehicle Excise Duty (VED) rules from the Labour government came into force.
The scale of the early renewals was unprecedented. The National Audit Office (NAO) reported a staggering 1,400 per cent increase compared to the previous year. This mass action effectively meant that about a quarter of all EVs on UK roads successfully avoided the new charge.
A Multi-Million Pound Impact
The financial consequence for the Treasury has been significant. The NAO estimates that EV road users have collectively avoided an estimated £30 million in road tax revenue as a direct result of this widespread workaround.
From April, EVs registered after 2017 became liable for the standard £195 a year charge once their first year on the road had passed. This change marked the end of a valuable tax exemption for zero-emission vehicles.
Political Reactions and Government Response
The NAO did not hold back in its assessment, warning the Government that the DVLA could have done more to predict this behavioural change. This foresight could have better informed HM Treasury's decision-making process.
Reform UK's deputy leader, Richard Tice, criticised the government's approach, labelling its net zero policies as 'net stupid zero'. He accused the government of imposing gratuitous taxes and promised that a Reform government would introduce logical policies and cut waste.
In response, a Government spokesman stated: “As with all tax policy changes, the Government sets out details on expected impacts at fiscal events, and the Government is committed to maintaining a sustainable tax contribution from motoring.”
