Electric car tax: UK drivers facing fines of up to £1,000 due to paperwork mistake

Electric car owners have been warned that they risk fines of up to £1,000 and having their vehicle clamped or seized for breaking a simple car tax rule. 

EVs currently qualify for free tax but some new owners are reportedly being caught out by a quirk in the rules that means they must still fill out the correct paperwork or face a fine, or worse. 

Despite being exempt from Vehicle Excise Duty (VED) - or car tax - EVs still need to be taxed each year on the DVLA’s system or declared SORN. If they fail to do this, drivers face the same punishment as anyone else failing to pay their car’s VED bill. 

Those include an initial fine of £80, which can rise to £1,000 in extreme cases. Drivers could also find their cars being clamped or seized if they fail to properly tax their tax-free car.

Tim Alcock from LeaseElectricCar.co.uk said some new EV drivers were surprised by the rules that mean even exempt cars have to be “taxed” once a year. He commented: “Many electric car owners know the perks of currently not having to pay any road tax, but some drivers are receiving unexpected fines for failing to register their EV in the tax system.

“This means you could be paying a fine of up to £1,000 yet if you had taken a couple of minutes to register your car you wouldn’t have to pay a penny. EV owners should be making the most of the fact that they are exempt from paying anything towards road tax before the law changes in just two years' time.”

From 2025 EVs will no longer be exempt from VED as the government tries to plug the loss in tax revenue created by drivers switching from petrol and diesel to electric. From 1 April 2025, any new EV will cost the same as the lowest-emitting petrol and diesel models in its first year - currently £10. 

After that they will be charged at the same flat rate as all other cars, currently £180 a year. The same flat annual rate will apply to any EV registered after 31 March 2017, meaning existing EV owners will also be caught out by the change.

The 2025 change will also end EV’s exemption from the Expensive Car Supplement - known as the luxury car tax. This applies an extra tax to any car with a list price of more than £40,000 and will mean most EV buyers will be liable to the additional £390 annual charge  for years two to six after registration.