Drivers of these cars face £590 car tax rise but there's a way to beat it

The annual car tax charge, currently set at £190 per year, will hit those with battery electric or plug-in vehicles from April 2025.

Electric car drivers face a staggering £590 hike in car tax under the new Labour Party government. The annual car tax charge, currently set at £190 per year, will hit those with battery electric or plug-in vehicles from April 2025.

But there may be a way to beat it - as EV owners with models valued at over £40,000 are warned they will also be liable to pay an additional ‘Expensive Car Supplement’ charge of £400, increasing total bills to £590, as the Cost of Living crisis continues.

Chancellor Rachel Reeves, the new Labour Party Chancellor, will deliver her Autumn Budget on October 30. Andy Wood, a tax expert from Tax Natives, explained: “Despite these new regulations, it’s important to note that some vehicles will remain exempt from paying VED.

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“According to the V355/1 DVLA document, there are several vehicle categories that still qualify for exemption, such as vehicles used by disabled individuals, historic vehicles over 40 years old, NHS, police, and fire service vehicles, as well as certain 'limited use' vehicles in agriculture and forestry.

“Ensuring these vehicles are correctly classified in the DVLA system will be crucial to avoid unnecessary payments after April 2025.” The expert added that "the Driver and Vehicle Licensing Agency (DVLA) is advising all motorists, especially those with exempt vehicles, to review their tax class".

He continued: “Misclassifying an exempt vehicle could result in unexpected tax liabilities once the new regulations take effect. Even vehicles that are currently exempt will still require owners to make sure they fall under the correct category.” He said: “It’s particularly vital for owners of 'limited use' vehicles — those used in agriculture, horticulture, or forestry with restricted road travel distances — to ensure they meet the criteria outlined in the V355/1 DVLA document.

“Failing to adhere to these requirements could lead to losing their tax-exempt status.”