Road Tax on Electric Cars | Saga Car Insurance

Do electric cars pay road tax?

Since 1 April 2025, electric cars are no longer free to tax, and drivers must now pay for vehicle tax on electric, zero- and low-emission cars.

How is road tax calculated?

Road tax, or vehicle excise duty (VED), is worked out based on:

the amount of CO2 emissions from your car
The car's list price
They year it was registered.

If you bought a new electric car registered after 1 April 2025, the charge for vehicle tax is £10 for the first year, which is the rate for 0g CO2/km emissions. After that it’s £195 a year, the standard rate for all cars, regardless of what fuel or power they use.

Electric cars registered after 1 April 2017 pay the standard rate each year.

The vehicle tax rate for electric cars registered prior to 31 March 2017 is £20 a year.

The list price of your vehicle at registration is taken into account. If it’s more than £40,000, an extra £420 is applied to the second through to the fifth yearly vehicle tax payment.

How do you apply for road tax for your electric car?

Just like with a standard car, you’ll get a yearly reminder from the DVLA. You need to follow the same process as with petrol or diesel cars where you either tax your car online or in a post office.

You pay tax when you first register your car for 12 months, then you pay tax every 6 or 12 months after that at a different rate. Don’t ignore your renewal notice, as you could be fined up to £1,000.

How does company car tax work on electric cars?

A company car is classed as a non-cash benefit that has monetary value so when you are given one to drive, benefit-in-kind (BIK) tax will be taken directly from your monthly salary via PAYE.

So, if your employer offers you an electric car as part of your pay package, you will need to pay company car tax on it, but it will be a lot less than for a petrol or diesel car.

Are there any savings when owning an electric car?

There are some other benefits that will help save you costs when you drive an electric car.

Businesses can claim back the full cost of one electric vehicle as a capital allowance and claim grants towards installing chargers through the Workplace Charging Scheme. This means access to free charging points for drivers.
Electric cars are no longer exempt from the London Congestion Charge. However, you can get a 25% discount on the daily charge if the car's registered with AutoPay.
There’s no need to pay duty on fuel, unlike petrol and diesel cars where fuel duty makes up most of the price at the pump.