Q. Is it advisable to purchase an electric vehicle before the upcoming tax modifications occur in April, or are others likely to have the same idea? Additionally, how much more will my expenses increase after April?

A. Making a purchase before March 31 will lead to substantial savings only if your budget exceeds £40,000. By acquiring a fully electric vehicle prior to the end of March, you will benefit from a zero vehicle excise duty (VED) for the first year. If you delay your purchase until April 1, that first-year VED will become £10, resulting in a modest saving of £10. From the second year onward, the standard annual VED rate will apply, currently set at £195. It’s important to note that this standard rate will impact every electric vehicle registered from April 2017 onwards. Previously, fully electric vehicles enjoyed a zero VED, while hybrid vehicles had reduced rates based on CO2 emissions. Starting April 1, all types of vehicles—petrol, diesel, electric, or hybrid—will incur the standard VED rate of £195. This tax change is also retrospective; if you own an electric vehicle registered before April 2017, you’ll start paying VED at a nominal rate of £20 annually.

The costs significantly escalate for vehicles priced over £40,000. For the first time, electric vehicles will incur a luxury car tax (officially known as the expensive car supplement) amounting to £425 per year, in addition to the standard VED of £195 for years two through six. Therefore, waiting until April could increase your total expenditure by at least £2,125 over the course of the next six years.

Fortunately, there is a wide range of electric vehicles available for under £40,000, from manufacturers like Abarth to Volvo. However, tread carefully, as some enticing offers may have significant discounts. Remember, the tax liability is determined by the vehicle’s list price (RRP).

For company car owners, the benefit-in-kind (BIK) tax will also experience an increase, rising from 2 percent to 3 percent in April, with a further annual increase of 1 percent until 2028. This tax applies to all electric company vehicles, irrespective of their age, yet remains notably lower than the BIK for petrol or diesel cars.

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