Plans being considered by Chancellor Jeremy Hunt for the Autumn Statement could see electric car and van owners having to pay road tax in less than three years, according to a report in the Daily Telegraph.
A Whitehall source told the newspaper that it was now “inevitable” that electric vehicles would be subject to road tax “at some point”, adding that the Treasury was considering “when that should be”.
Owners of EVs would begin paying Vehicle Excise Duty (VED) from the 2025/26 financial year, with the report stating that this is one of the options being considered by the Treasury to help plug the projected hole in public finances.
The report states that earlier this year MPs warned that the £35 billion annual revenue from vehicle excise duty and fuel duty was set to fall to zero by 2040. The Transport Select Committee has called for all drivers to be charged based on the distance they travel.
A Whitehall source told the Telegraph: “Everyone knows that electric vehicles will have to be subject to road tax at some point. The Treasury is considering when that should be, while ensuring uptake isn’t disincentivised in the short-term.”
Currently, zero vehicle excise duty is paid on electric vehicles, with the government previously guaranteeing the exemption until at least 2025.
The Autumn Statement is scheduled for 17th November 2022.
Image courtesy of Shutterstock.