One of the biggest changes for the EV industry in the UK was made as Chancellor Jeremy Hunt announced that EVs will be required to pay Vehicle Excise Duty (VED) from 2025. As of now, all zero-emission cars are exempted from paying Vehicle Excise Duty (VED), along with ULEZ and congestion charges. The Autumn budget update means major implications for PCO car hire in London and any EV owners in general. Here’s everything you need to know about it:
Vehicle Excise Duty Rates
Depending on the car’s age and the scale of emissions it produces, there’s a varying amount of VED that applies to it. For the first year, EV owners will have to pay the lowest band of VED at £10 currently.
Diesel and petrol car owners will be paying much more, ranging from £120-£945 in the first year and then £165 a year for the next five years. There might be some surcharge depending on the price of the car, so some EVs might also be targeted.
Not All Gloom
Despite this, the UK government will be looking to provide some incentives to transition to cleaner vehicles for both the general public and businesses. Jeremy Hunt stated that the company car tax rates will remain lower for electric vehicles and that rate increases will be limited to 1% a year for three years from 2025.
The Effect on the PCO Industry
In recent years, electric vehicles have been heavily adopted by people in the UK. Considering that they provided great incentives as well as cheaper operational costs, there are more EVs on the street than ever. While the autumn budget update will have some effect on the EV industry, EVs will remain a viable option for PCO drivers.
There’s a potential 23% rise in fuel duty, which could make petrol and fuel cars less feasible for the public, as suggested by the Office of Budget Responsibility.
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