Electric car owners can no longer avoid vehicle excise duty (VED). The government has closed that loophole as part of its multi-pronged effort to balance the nation’s books. From 1 April 2025, EVs must pay electric car tax for the right to drive on UK roads.
All first-year car tax rates have been confirmed for 2025, and any electric car registered on or after 1 April 2025 will pay £10 for its first year on the road until the 2029-30 tax year. It’s also been confirmed that the old Band A (which is currently £0) will be removed. Vehicles in Band A will be recategorised into the first band where a rate becomes payable – usually Band B – which means £190 per annum from year two.
While this new charge is a little irritating for EV owners, it’s worth noting that electric cars will still pay the less road tax than their petrol- or diesel-powered counterparts. The government has also raised the tax rates for combustion engine cars as well as vans and pickups in a move it says will ‘strengthen incentives’ for shifting towards electrified vehicles.
The 2025 electric car tax VED changes detailed
- New EVs registered on or after 1 April 2025 will be liable for the lowest first-year rate of VED, currently £10 a year
- From the second year, they will move to the standard rate, currently £190 a year
- EVs registered between 1 April 2017 and 31 March 2025 will also pay the standard rate
- The Expensive Car Supplement (£40,000+) exemption for EVs is due to end in 2025. New zero-emission cars registered on or after 1 April 2025 will therefore be liable for the Expensive Car Supplement (currently £410 a year).
- Zero- and low-emission cars registered between 1 March 2001 and 30 March 2017 currently in Band A will move to the Band B rate, currently £20 a year
From next year, all combustion cars (including hybrids) that emit between 1–50g/km of CO2 will now pay £110 for their first year on the road. That’s an increase of £100 over the current rate. Plus, the tax rates for any vehicle that emits more than 76g/km of CO2 will double over their current figures. For contirmation of exactly what you pay now, you can enter your registration number into our Car Tax Calculator.
The decision to make electric cars pay VED is an overhang from the previous government – but the current one has implemented it. The former Chancellor of the Exchequer, Jeremy Hunt, announced the change in his 2023 Autumn Statement. He said: ‘To make our motoring tax system fairer, I’ve decided that electric vehicles will no longer be exempt from vehicle excise duty.’
Chair of the Transport Committee, Huw Merriman MP, added: ‘It’s time for an honest conversation on motoring taxes. The government’s plans to reach net zero by 2050 are ambitious. Zero emission vehicles are part of that plan.’
The Expensive Car Supplement changes explained
The government is changing the VED Expensive Car Supplement threshold for electric cars. It says it ‘recognises the disproportionate impact’ the scheme has on zero-emission vehicles, which are generally more expensive than their petrol-powered equivalents.
New electric and zero-emission vehicles registered on or after 1 April 2025, with the list price exceeding £40,000, will attract the standard rate of VED, plus the expensive car supplement for the first five years. The upshot is that owners of expensive electric cars car pay up to £600 per year in car tax.
What does the industry make of the change?
Nicholas Lyes, RAC head of policy, said of the changes: ‘After many years of paying no car tax at all, it’s probably fair the government gets owners of electric vehicles to start contributing to the upkeep of major roads from 2025. We don’t expect this tax change to have much of an effect on dampening the demand for electric vehicles given the many other cost benefits of running one.’
The prospect of introducing VED for electric cars is controversial. Since the government withdrew the Plug-in Car Grant, free road tax has become the last remaining financial benefit for private buyers making the switch to an electric car.
But VED raises billions of pounds each year – and the government needs to maintain income in the face of falling revenues from the sale and use of petrol and diesel cars. As electric cars will become far more common as we head towards the 2030 ban on new petrol and diesel cars, maintaining their exemption from VED has been judged unsustainable.
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Keith Adams is the Editor of Parkers. During his career he has been the editor of Classic Car Weekly, Modern Classics and Honest John Classics, as well as writing for CAR magazine, Practical Classics, Octane, Autocar and The Independent among others. Keith lives in rural Lancashire and enjoys buying and selling cars and reading and writing about them.
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