Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to balance the potential financial impact of changes to Vehicle Excise Duty from 2025 on owners of (a) internal combustion engine vehicles and (b) electric vehicles with potential national economic impacts.

At Autumn Statement, the Chancellor announced that from April 2025 electric cars, vans and motorcycles will begin to pay VED in the same way as petrol and diesel vehicles.

The tax treatment for ICE vehicles will remain the same, with those registered after 2017 paying a first-year rate, based on emissions, before moving to a standard annual rate – currently set at £180.

Removing the VED exemption from April 2025 adds fairness to the tax system, and its impact should be minimal given the marginal cost of VED compared to the overall cost of a vehicle . The government has also announced the continuation of incentives for electric vehicles through company car tax, which will likely continue to be effective in incentivising EV take up, and investment in chargepoint infrastructure.