Home / News / Do Electric Cars Pay Tax

Do electric cars pay tax?

17th November 2021

Road tax, formally known as vehicle excise duty (VED), is calculated depending on the CO2 emissions your vehicle emits, as well as the list price of your car and the year it was registered. However, for cars registered before March 2001, road tax is based on engine size.

You will pay your first vehicle excise duty rate when you initially register your car – after this, you then pay vehicle tax every 6 or 12 months at a flat rate. Generally, you may have to pay higher rates for diesel cars that do not meet the Real Driving Emissions 2 (RDE2).

What is the difference between first year and standard rates

Road tax is divided into two separate payments, the first charge is dependent on a car’s CO2 emissions, the second is a flat rate – meaning this tax is fixed at the same amount each payment.

Do electric cars pay tax 

Pure battery electric vehicles (BEVs) are exempt from paying road tax as they are zero emission vehicles. This means electric car owners don’t have to pay the first tax or any subsequent tax thereafter. There used to be an additional tax on premium vehicles costing over £40,000, however this charge does not apply to electric vehicles either.

Do hybrid cars pay tax?

Unlike electric cars, hybrid cars are not completely exempt from road tax. Plug-in hybrid cars (PHEVs) do still have to pay the initial road tax as well as the flat rate. However, hybrid cars do pay significantly less tax than diesel or petrol fueled cars.

 Current road tax rates

Vehicle CO2 emissions First year rate
(FYR) 2021-22
Standard rate
(SR) 2021-22
Premium supplement (vehicles with list price > £40k)
0 g/km £0 £0 £0
1-50 g/km £0 £145 £335
51-75 g/km £15 £145 £335
76-90 g/km £105 £145 £335
91-100 g/km £130 £145 £335
101-110 g/km £150 £145 £335

If you would like to find out more about any motor related queries, then be sure to browse our helpful blog. If you are looking for electric car services then you can book an appointment online, or visit an Merityre specialist branch near you.