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Until now, one of the big benefits of owning an electric vehicle (EV) in the UK has been free road tax. Unlike petrol and diesel vehicles which incur annual charges, EVs have enjoyed a £0 tax rate.
However, this perk will end in April 2025, and new tax regulations will apply to both new and existing EVs. These changes are part of the government’s efforts to ensure sustainable funding for road infrastructure as EV sales increase.
In this article, we’ll explain everything you need to know.
What is road tax?
Road tax, officially known as Vehicle Excise Duty (VED), is an annual fee charged on motor vehicles used or parked on public roads in the UK. This tax helps the government pay for the maintenance and development of the country’s roads.
The amount of road tax you need to pay is determined by your car’s emissions levels. Higher-emission cars incur higher fees.
Do electric cars need to pay road tax?
Yes. Starting 1 April 2025, owners of electric and other low-emission cars, vans, and motorcycles will be required to pay road tax.
This change affects newly registered EVs and those already on the road, effectively eliminating band A of the VED system, which currently stands at £0.
How much road tax will I pay on my electric car?
Starting 1 April 2025, the amount of road tax you'll pay depends on when your EV was registered.
Registered on or after 1 April 2025: New EVs will need to pay the lowest first-year tax rate set at £10. The standard rate of £195 will apply from the second year onwards.
Registered between 1 April 2017 and 31 March 2025: You'll need to pay the standard rate of £195 per year.
Registered between 1 March 2001 and 31 March 2017: Your EV will move into the lowest paid band of road tax, meaning you’ll need to pay £20 per year.
Do electric cars need to pay the ‘Expensive Car Supplement’?
Yes. Starting 1 April 2025, newly registered electric cars (but not vans) with a list price over £40,000 will be subject to the Expensive Car Supplement. This adds a £410 annual charge that starts in the second year of registration until the car’s sixth year.
The list price includes any options added but does not account for discounts, so it's important to consider the official cost rather than the discounted price. As a result, car manufacturers may adjust pricing to keep models attractive and below the threshold.
The expensive car supplement will not apply to EVs registered before 1 April 2025.
How much road tax will I pay on my electric van?
Starting 1 April 2025, electric vans will shift to the standard annual rate for light goods vehicles, currently £140 per year for most vans. Find more details here.
Will hybrids need to pay more too?
Yes. Starting 1 April 2025, the £10 per year discount for hybrids will be discontinued and the tax rate will depend on the vehicle's registration date.
Registered Before 1 April 2017: The rate will be based on the vehicle’s CO2 emissions, find details here.
Registered After 1 April 2017: You’ll pay the standard rate which is £195 per year.
What happens if my vehicle’s road tax is included in my leasing contract?
The cost of road tax which applied when you took out your contract hire agreement would have been included in your monthly rentals. While the contract hire funder will continue to pay for the road tax, they’ll bill you for the additional cost and will usually take payment by direct debit.
What happens if my vehicle is registered with the finance company?
If you have a Finance Lease (FL), Contract Purchase (CP), or Personal Contract Purchase (PCP) agreement, the vehicle will usually be registered to the finance company, where only the first 12 months of road tax are included. In these cases, the finance company will re-tax the vehicle on your behalf. They’ll send you a bill for the cost of taxing the vehicle and will usually take payment by direct debit.
How do I tax my electric car if it’s registered to me?
Starting 1 April 2025, paying road tax for your electric car will follow the same process as taxing any other car. You can make a one-off payment for six or twelve months, or opt for monthly Direct Debit installments.
The payment can be made online through the official vehicle tax website, at a Post Office, or over the phone. Whichever method you choose, the process will remain straightforward.
If you sell or buy an electric vehicle, the tax transfer process will stay unchanged, with the new owner responsible for arranging payment. Registering your vehicle as off-the-road (SORN) will also follow the same steps as before.
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