Road Tax Increase in April 2025

Starting April 1, 2025, the United Kingdom will implement significant changes to the Vehicle Excise Duty (VED), commonly known as road tax, affecting all vehicle owners, including those with electric vehicles (EVs). These adjustments are part of the government's strategy to promote the adoption of zero-emission vehicles and to increase tax revenues.​ 

Electric Vehicles (EVs):

• New EVs Registered On or After April 1, 2025: For the first time, new zero-emission cars will incur a VED charge of £10 in the first year. From the second year onward, these vehicles will be subject to the standard annual rate of £195. ​
• Existing EVs Registered Between April 1, 2017, and March 31, 2025: Owners of these vehicles will begin paying the standard VED rate of £195 annually starting April 1, 2025. ​
• Older EVs Registered Between March 1, 2001, and March 31, 2017: These vehicles, which were previously exempt, will now be taxed at £20 per year. ​
• Expensive Car Supplement: New EVs with a list price exceeding £40,000 will be subject to an additional annual charge of £410 for five years, starting from the second year of registration. This supplement applies irrespective of any discounts or incentives received at the time of purchase, as it is based on the manufacturer's recommended retail price. 

Hybrid Vehicles:

• First-Year Rates: Cars emitting between 1–50g/km CO₂, including hybrids, will see their first-year VED increase to £110, while those emitting 51–75g/km CO₂ will have a first-year rate of £130. ​
• Subsequent Years: From the second year onward, hybrid vehicles will pay the standard annual rate of £195. ​
  
  

Petrol and Diesel Vehicles:

• First-Year Rates: Vehicles emitting 76g/km CO₂ and above will experience a doubling of their first-year VED rates. For instance, a new Ford Puma's first-year tax will increase from £220 to £440, while a Range Rover could see a rise from £2,745 to £5,490 in the first year alone. 
• Standard Rates: The standard annual VED rate for petrol and diesel cars will remain at £190 per year. 

Vans and Motorcycles:

• Vans: Electric vans will move to the same rate as petrol and diesel light goods vehicles, which is currently £335 a year for most vans.
• Motorcycles: Electric motorcycles and tricycles will no longer be exempt from tax and will instead be subject to the lowest rate, which is currently £25 per year. ​

These changes underscore the government's commitment to adjusting tax policies in line with environmental objectives and fiscal requirements. Vehicle owners are advised to review these updates carefully to understand their financial implications and consider them when making future vehicle purchases.