Big changes are coming to UK Vehicle Excise Duty (VED), better known as car tax, starting April 1, 2025. Whether you drive a petrol, diesel, hybrid, or electric vehicle (EV), these updates will affect you.
The most notable update is that electric vehicles (EVs) will no longer be exempt from road tax. Additionally, first-year tax rates for new vehicles will increase significantly, while standard road tax is going up slightly for most cars.
Electric Vehicle Tax Updates
At present, electric vehicles (EVs) enjoy the perk of incurring no Vehicle Excise Duty (VED) charges. If you own or are considering an EV, here’s what’s changing:
- New EVs (registered on or after April 1, 2025) will pay £10 in first-year road tax. If the vehicle originally cost more than £40,000, it will also be subject to the expensive car supplement of £425 per year for five years.
- EVs registered between April 1, 2017, and March 31, 2025 will now pay the standard road tax rate of £195 per year.
- Older EVs (registered between March 1, 2001, and March 30, 2017) will be taxed at £20 per year.
- Electric vans will now be charged £355 per year, matching petrol and diesel vans.
This is the first time EV owners will need to factor in road tax costs.
First-Year Road Tax Rates Are Increasing
If you’re buying a brand-new car, your first-year tax bill will depend on CO₂ emissions and from April 2025, these rates are doubling or even tripling. The first year tax figure is calculated based on the amount of carbon dioxide the vehicle produces:
- 0g/km → £10 (previously £0)
- 1-50g/km → £110 (previously £10)
- 76-90g/km → £270 (previously £135)
- 151-170g/km → £1,360 (previously £680)
- Over 255g/km → £5,490 (previously £2,745)
Standard Road Tax (VED) from April 2025
From April 2025, the standard annual tax rate for all cars registered after April 1, 2017, will increase:
- £195 per year for petrol, diesel, hybrid, and now electric cars.
- The expensive car supplement (for vehicles priced over £40,000) will be £425 per year for five years.
What About Older Cars?
If your car was registered between March 1, 2001, and March 31, 2017, your road tax is still based on CO₂ emissions, but some rates are increasing by £5-£25 per year:
- 0-100g/km → £20 (previously £0)
- 201-225g/km → £430 (previously £415)
- Over 255g/km → £760 (previously £735)
Will Your Car Tax Increase?
For most drivers, yes. Nearly all car owners will see higher road tax costs, but the biggest change will be on EV drivers, who will need to start paying road tax for the first time.
You can check the government’s car tax rate tables if you’re not sure how much your road tax is.
Check your current road tax rate so you’re not caught off guard.
Factor in tax costs when buying your next car, a used car might save you money!
If you own an EV, renew your road tax before April 2025 to get one more year of tax-free driving.
Looking for a Low-Tax Used Car?
If you’re in the market for a used car, you might be able to avoid some of these extra costs by:
• Buying an EV registered before April 2025 (these won’t be subject to the expensive car supplement).
• Opting for a lower-emission petrol or diesel model to reduce your first-year tax bill.
At Used Cars
NI, we have great deals on fuel-efficient and electric vehicles. Browse our
website today and find the perfect car for your budget before the new tax rates
kick in! 
