2025 EV Road Tax Changes
Published Date: 6th Aug 2024
At UK Car Discount, we are dedicated to keeping our customers informed and up-to-date on all matters that affect new car buying, including changes to vehicle tax. In line with this commitment, we provide detailed information on the upcoming changes to the Vehicle Excise Duty (VED) for electric vehicles (EVs). Starting 1 April 2025, EV owners in the UK must pay road tax. This change, announced by the Government in the 2022 Autumn Budget, is part of an effort to create a fairer motoring tax system. As Chancellor Jeremy Hunt stated: "To make the UK motoring tax system fairer, I've decided that electric vehicles will no longer be exempt from Vehicle Excise Duty (VED)."
NEW 74-PLATE ELECTRIC CAR DEALS
2025 EV Road Tax Changes
The road tax changes for electric vehicles from 2025 are as follows:
1 - New Zero-Emission Cars Registered on or after 1 April 2025:
- Are now liable to pay the lowest first-year rate of VED (applicable to vehicles with CO2 emissions of 1 to 50g/km), currently £10 per year.
- From the second year of registration onwards, these vehicles will move to the standard rate, currently £190 per year.
2 - Zero Emission Cars Registered Between 1 April 2017 and 31 March 2025:
- These vehicles will pay the standard rate, currently £190 per year.
3 - Expensive Car Supplement:
- The exemption for electric vehicles is due to end in 2025. New zero-emission cars registered on or after 1 April 2025 with a list price exceeding £40,000 will trigger the Expensive Car Supplement. This supplement, currently £410 per year, applies for five years, meaning that EV drivers with an 'expensive car' could pay up to £600 per year for road tax.
4 - Zero and Low Emission Cars Registered Between 1 March 2001 and 30 March 2017:
- Vehicles in Band A will move to the Band B rate, currently £20 per year.
5 - Zero-Emission Vans:
- These will move to the rate for petrol and diesel light goods vehicles, currently £335 per year for most vans.
6 - Zero-Emission Motorcycles and Tricycles:
These will move to the rate for the smallest engine size, currently £25 per year.
7 - Alternative Fuel Vehicles and Hybrids:
Rates will be equalised, removing the £10 annual discount for alternative fuel vehicles and hybrids.
Do Electric Vehicles (EVs) Need to be Taxed?
Almost all vehicles need to be road-taxed to drive on UK roads, and this now includes electric vehicles (EVs). Currently, EV drivers enjoy a significant advantage, as they do not have to pay anything to tax their car; the annual Vehicle Excise Duty (VED) is provided free of charge as part of the Government's initiative to promote cleaner transportation. This exemption has encouraged many consumers to consider switching to electric vehicles, contributing to reduced carbon emissions. However, this situation is set to change in 2025 when new policies are introduced, and EV drivers will be required to contribute to road taxes like traditional combustion engine vehicles. This shift will help fund road maintenance and infrastructure improvements while supporting the transition to greener alternatives.
Annual Payments for EV Owners
In addition to road tax, EV owners should be aware of other annual payments associated with electric vehicles:
1 - Electricity Costs:
Charging an electric car at home will increase electricity consumption. The cost depends on the vehicle's efficiency, local electricity rates, and the number of miles driven.
2 - Car Insurance:
EV insurance is mandatory before driving. The cost can vary depending on driving history, specific vehicle model, and insurance provider.
3 - Maintenance:
While electric cars generally have considerably fewer moving parts and require much less maintenance than traditional combustion engine vehicles, routine maintenance such as tyre rotations, brake pad replacements, and fluid top-ups still costs money. These costs vary based on the electric car's make and model. Consult your local garage for the best advice on vehicle maintenance.
Electric Vehicle (EV) Road Tax Explained
Road tax, or VED or car tax, is an annual payment imposed on motor vehicles operating on public roads in the UK. The Government uses taxation to generate revenue and contribute to the costs of maintaining and repairing road infrastructure. Road tax is presently calculated based on emissions levels, with higher-emission vehicles paying more each year due to their greater contribution to pollution and environmental impact.
Does Every Vehicle Owner Have to Pay Road Tax in the UK?
While some vehicles are exempt from paying vehicle tax each year, all cars must be taxed, even if no payment is required. This legal requirement applies to all EV owners, and failure to comply can result in issues with the police. From 1 April 2025, drivers of electric and low-emission cars, vans, and motorcycles will need to pay vehicle tax like drivers of internal combustion engine (ICE) vehicles. This change applies to new and existing vehicles, ensuring all drivers contribute fairly to road tax.
How the Changes Will Affect Your Vehicle
1 - Electric and Low-Emission Cars Registered on or after 1 April 2025:
These vehicles must pay the lowest first-year vehicle tax rate (applicable to cars with CO2 emissions of 1 to 50g/km). From the second tax payment onwards, they will pay the standard rate, which is £190 for 2024 but subject to change for 2025.
2 - Electric and Low Emission Cars Registered Between 1 April 2017 and 31 March 2025:
- These vehicles will pay the standard rate, currently £190 per year, subject to change for 2025.
3 - Electric and Low Emission Cars Registered Between 1 March 2001 and 31 March 2017:
- These vehicles will move to the first band with a VED value, currently £20 per year, subject to change for 2025.
4 - Alternative Fuelled Vehicles (AFVs):
- The £10 annual discount for AFVs and hybrids will be removed, and the rate will depend on the vehicle's registration date:
- Registered before 1 April 2017: Rate depends on the vehicle's CO2 emissions.
- Registered on or after 1 April 2017: Standard rate, currently £190 per year, subject to change for 2025.
5 - New Electric Vehicles with a List Price Exceeding £40,000:
From the second tax payment onwards, these vehicles must pay the Expensive Car Supplement, which applies to all vehicles registered on or after 1 April 2025.
The introduction of road tax for electric vehicles in 2025 marks a significant shift in the UK's motoring tax system. While this change aims to create a fairer system for all drivers, it also signifies the end of a major incentive for EV adoption. As such, prospective EV buyers and current owners should always stay informed about these changes and consider their ownership impact on the overall cost of owning an electric vehicle. Regular government policy and incentive updates are essential to ensure EV owners can make informed decisions and benefit from any available financial advantages.
NEW 74-PLATE CAR DEALS OFFERS DISCOUNTS
Why Buy from UK Car Discount?
Safer Way to Pay Policy: At UK Car Discount, you only pay after receiving your vehicle, inspecting it, and ensuring you are completely happy. This unique final payment scheme offers peace of mind and a secure purchase.- Genuine UK Main Dealer-Supplied Vehicles: All our vehicles are sourced directly from UK main dealers and come with full manufacturer's warranties.
- Complimentary Driven Delivery: Enjoy free delivery to your doorstep for all UK addresses. A modest surcharge may apply to select Scotland postcodes.
- Transparent Pricing: The new car quote you receive is the final OTR Price, with no hidden fees. The only variables are any changes in VAT rate or VED cost at the point of delivery.
- Rigorous Main Dealer Pre-Delivery Inspection: All supplied vehicles undergo thorough inspections to ensure they arrive in prime condition.
Understanding changes to VED tax systems empowers our customers to make more educated buying decisions, align their purchases with their budgets, and ensure they are well informed about anything that could influence the cost of ownership now or in the future. By staying updated on these tax changes, customers can better anticipate potential expenses related to vehicle ownership, such as ongoing taxes, insurance costs, and maintenance fees. This knowledge not only aids in budgeting but also helps them choose vehicles that offer the best long-term value and efficiency, ultimately leading to more satisfying and financially sound choices.
FULL MANUFACTURER WARRANTY
FREE HOME DELIVERY SERVICE
(Some Scotland postcodes may incur a surcharge - please ask for details)
SAFER WAY TO PAY POLICY
Note: Vehicle specifications, trim levels, options, and engines are subject to change anytime. Therefore, confirming the vehicle specifications you are interested in when you purchase is essential. Vehicle manufacturers also reserve the right to change specifications without notice.