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The amount of road tax electric car owners will be liable to pay from April 2025 will depend on when the vehicle was first registered and how much the car was worth new:

registered from 1 April 2017 onwards From April 2025 electric car owners will pay VED at the standard rate, currently £165 p.a.. However, for cars registered on or after 1 April 2025 this is reduced to the lowest rate in year one only, currently £10 p.a.

registered between 1 March 2001 and 30 March 2017 Electric vehicles registered between these dates who are currently in Band A, will move to Band B. The rate of Band B is currently £20 p.a. This also applies to low emission cars.

Expensive Car Supplement

Electric cars were previously exempt from the Expensive Car Supplement, which currently requires other car owners whose car has a list price of over £40,000 to pay the supplement for five years. However, from April 2025 the exemption for electric cars will end and any new zero emission cars registered on or after 1 April 2025 will be liable for the supplement. There has been no confirmation yet on the rate electric cars will pay, however, the rate for petrol or diesel cars is currently £165 p.a., which is paid in addition to the road tax.

Road tax on other electric vehicles

� Electric vans will move to the rate for petrol and diesel light goods vehicles from April 2025, currently £290 a year for most vans.

� Electric motorcycles and tricycles will move to the rate for the smallest engine from April 2015, currently £22 p.a. � Alternative fuel vehicles and hybrids will also be equalised.

Benefits In Kind on Electric Cars

When an employee is provided with a company car, and they are able to use this car for personal journeys, they will be charged tax on it, known as a BIK.

The BIK on electric cars is currently 2% of the list price, however, it was announced Whilst this will increase the amount of tax paid by directors/employees, the same one percentage point increase is also being applied to the BIK rates on all other non-electric cars, which still makes electric cars far more tax efficient than their petrol or diesel counterparts, whose BIK percentages can reach 37%.

Changes to Personal tax

Jeremy Hunt started his budget by extending the freezing of many personal tax thresholds, inclusive of Income Tax, National Insurance (NICs) and Inheritance Tax for a further two years to April 2028. Given current levels of inflation, this will result in additional tax being paid by most individuals.

Furthermore the Autumn Statement reduces the generosity of certain other thresholds and allowances, including the Dividend Allowance, the Capital Gains Tax (CGT) annual exemption, and the threshold at which the Additional Rate (45%) of tax applies.

Dividend Allowance

The tax free dividend allowance will be halved to £1,000 in April 2023, and then further reduced in April 2024 to £500. This means that an additional £1,500 of dividends will be taxable income, generating upwards of £3bn of tax by the 2027-28 fiscal year.

Capital Gains Tax

Also significantly cut is the Annual Exempt Amount for CGT. This will be more than halved to £6,000 in April 2023, and then halved again to £3,000 in April 2024. However, the reporting limit for proceeds has been set at £50,000 from April 2023, rather than the current limit of four times the AEA. Overall this is expected to generate revenue of £1.6bn by 2027-28.

In additional support to couples who are in the process of divorcing, no gain/ no loss transfers are confirmed to be extended for three years following separation, which should allow for most settlements.

Additional Rate

In the past few months, the additional rate of tax has been removed altogether, reintroduced, and now it has been announced that the threshold at which it commences will be reduced from £150,000 to £125,140 in April 2023. This means that after you lose your entire personal allowance, you now also begin to pay Income Tax at a 45% marginal rate (39.35% for dividends) too. This reflects Hunt’s statement that those with more will contribute more towards the UK’s financial recovery, generating more than £3.7bn in the next five years.

National Minimum and Living Wages

In an effort to stimulate income for workers and combat low pay, rates of National Minimum and National Living Wages were increased by an average of 9.9%. With National Living Wage increasing for those over the age of 23 by 9.7% to £10.42. This represents an increase of over £1,600 to the annual earnings of a full time worker paid at this level, however many more workers on the lowest wages will have additional Income Tax and National Insurance Contributions due as a result in the aforementioned freezing of tax thresholds.

Triple Lock

The Chancellor spoke significantly about compassion within his statement, including supporting those on fixed incomes and income support. Benefits will be uprated by September Consumer Price Index (CPI), being 10.1%, and the triple lock has been honoured to include state pension. The benefit cap and pension credit will also be uprated by the same. CPI, ensuring those on the lowest incomes will be protected from the effects of inflation on their incomes.

Stamp Duty Land Tax

Stamp Duty Land Tax measures remain unchanged until 31 March 2025, with the nil rate threshold for all purchases at £250,000 and for first time buyers at £425,000. With the Office of Budget Responsibility predicting a fall in house prices of up to 10% over the next two years and mortgage interest rates continuing to increase, reducing these thresholds immediately could further stifle the housing market.

To discuss your situation in more detail contact your advisor on 01242 776000, or email tax@randallpayne.co.uk