DRIVERS can get car tax free for a year but you need to get your skates on as the deadline is just hours away, Martin Lewis has warned.
The founder of the Money Saving Expert (MSE) website, 51, has urged electric vehicle owners to see if they are eligible ahead of big changes coming next year.
RexMartin Lewis shared the details in his MSE newsletter[/caption]
Martin shared the advice in his MSE newsletter and urged motorists to check if they could take advantage of the hack.
The post said: “Urgent. Electric vehicle owner? Check NOW if you can get FREE tax for another year.
“If you’ve got a zero-emission car, van or motorcycle first registered on or after 1 April 2017, and your ‘tax’ is due to start on 1 April (or 1 May in some cases), you can delay paying electric vehicle tax till 2026.”
The email contained a link to the MSE page which gave further details of the hack.
The website explained millions of drivers are exempt from paying vehicle excise duty (VED) – aka car tax or road tax – until April 1, 2025.
What is Vehicle Excise Duty and what are the rates?
No one likes paying tax but it is better than getting a fine from the DVLA.
Vehicle Excise Duty, or VED, is also referred to as vehicle tax, car tax or road tax.
Most vehicles used – or parked – on public roads in the UK will be subject to VED.
It’s collected and enforced by the DVLA, and if you aren’t using your vehicle, you must make a SORN, or Statutory Off Road Notification, to take it off the road.
You can pay VED in one 12-month amount, split it into two six-month payments or opt for monthly instalments.
Currently, no. But as announced by Jeremy Hunt electric cars will start paying VED road tax from April 2025.
Hunt said: “Because the OBR (Office for Budget Responsibility) forecast half of all new vehicles will be electric by 2025, to make our motoring tax system fairer I’ve decided that from then, electric vehicles will no longer be exempt from vehicle excise duty.”
The exact amounts are yet to be announced, but Hunt also said company car tax for electric cars will increase by 1 per cent for three years from 2025.
There are two payment schedules in effect, and the one your vehicle belongs to depends on whether your car was first registered before or after 1 April 2017.
For cars registered before 1 April 2017, the excise duty depends on two criteria:
If the car was registered before 1 March 2001, the excise duty is based on engine size – £180 for vehicles with a capacity of less than 1549cc, and £295 for vehicles with bigger engines
If the car was registered after 1 March 2001, charges are based on theoretical CO2 emission rates per kilometre. Check out the GOV.UK site for more details.
Cars registered after 1 April 2017 operate under a different schedule, where hybrid vehicles are no longer rated at £0 and cars with a retail price of £40,000 and over will pay a supplement for the first five years of the standard rate. The RAC website has further information.
Chancellor Jeremy Hunt has said the move to tax electric cars is designed to make the system of tax more equal for all drivers.
But there is a way you can delay this so you don’t have to pay until April 1, 2026.
Any new zero emission vehicles registered on or after April 1, 2025 will be liable to pay the lowest first year rate of VED which applies to vehicles with CO2 emissions from one to 50g/km, according to the rules.
Then from the second year onwards, they will move to the standard rate, with any EVs initially registered between April 1, 2017, and March 31, 2025, also paying the standard rate.
In order to get free tax for a year, drivers of electric cars need to renew the tax before April 1, 2024 – this coming Monday.
You then need to do the same again before April 1, 2025.
By doing this, you will push back the deadline for paying tax on your EV to when it is due for renewal in the last week of March 2026.
Five major VED exemptions
Low and no-emission vehicles – those emitting less than 100g/km of carbon dioxide registered before 2017
Historic vehicles – those which are more than 40 years old on a rolling basis
Vehicles used by disabled people – if you qualify for the higher rate of major disability benefits including Disability Living Allowance, Personal Independence Payment or Child Disability Payment
Vehicles used for agriculture, horticulture and forestry – including tractors
Vehicles registered Statutory Off Road Notification (SORN)
However, the money saving experts warned you can only do the hack as long as your electric vehicle was registered on or after April 1, 2017 and your tax on it is due to begin in April 1, 2024 or May 1, 2024 in some cases.
The MSE team said: “As the earliest the DVLA allows you to tax your vehicle is the fifth day of the month your current tax expires – so if it expires 31 March, the earliest you can tax it again is 5 March.”
Anyone taking advantage of the hack should be aware that even though electric car owners do not need to pay VED on their motors until 2025, they do still need to tax them, or they could face a fine.
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