Electric vehicles have been exempt from road tax for many years but changes being introduced on 1 April 2025 mean EV owners will now pay in the same way as petrol or diesel cars.
Road or car tax – officially known as Vehicle Excise Duty (VED) – is an annual fee that all cars that are used or parked on UK roads have to pay.
The tax generates money that contributes to the maintenance and improvement of the nation’s roads and is based on the emissions of each car. Historically, the more polluting a vehicle, the higher the annual tax rate.
But now with zero emission vehicle sales soaring, the government has decided it’s time to adjust the vehicle excise duty rules to boost the money coming into the Treasury with electric vehicles moving to the standard tax rate.
So, what does it mean for electric car owners of both older EVs and new electric vehicles? Let’s explore the 2025 car tax changes in more detail…
Electric car tax changes from 1 April 2025
From 1 April 2025, owners of electric vehicles will have to pay vehicle tax for the first time – with the £0 tax band being removed completely. Plus, EVs costing over £40,000 will now be subject to the extra Expensive Car Supplement.
New electric vehicles registered after 1 April 2025 will pay the lowest first year rate of vehicle tax at £10. In year two, they’ll pay the standard £195.
For any existing electric car registered between 1 April 2017 and 31 March 2025, drivers will move to the standard tax rate – which is £195 per year.
Any older electric vehicles registered before 1 April 2017 will move to the £20 a year vehicle excise duty tax band.
The car tax changes also impact plug-in hybrid electric vehicles (PHEVs), which will no longer have reduced vehicle excise duty rates compared to petrol or diesel vehicles.
Do electric car owners pay the luxury car tax?
And what about the Expensive Car Supplement? This is an extra £425 a year surcharge for zero emission vehicles that cost over £40,000 and are registered after 1 April 2025.
Electric vehicle owners were previously exempt from the luxury car tax but anyone buying a new electric car with a list price of over £40,000 will now have to pay it.
The Expensive Car Supplement kicks after the first year, so electric car drivers pay the lower £10 rate in year one, followed by £620 in year two to six of ownership (that’s the standard rate plus surcharge).
Do electric vans pay road tax in 2025?
Just like electric cars, zero emission vans are no longer exempt from road tax. As of 1 April 2025, electric vans and light commercial EVs will move to the standard tax rate.
For vans, this is £335 a year.
Are electric vehicles cheaper than petrol and diesel to run?
Not having to pay car tax was a big incentive for switching to an electric car and made it much cheaper to run an EV than a petrol or diesel car.
However, just because EVs now have to pay road tax, it doesn’t mean EVs are more expensive. In fact, when you look at total cost of ownership – which includes insurance, tolls, charging, servicing and maintenance, it’s still often cheaper (not to mention greener) to have an electric car.
EV drivers thinking about making the switch can read more about electric car running costs in our complete guide.
