14 March 2025

Changes to Vehicle Tax for Electric, Zero, or Low Emission Vehicles from April 2025

Starting 1 April 2025, the way Vehicle Excise Duty (VED) is calculated for electric, zero, or low-emission vehicles will undergo significant changes. From this date, registered keepers of these vehicles will be required to pay vehicle tax in the same way as owners of petrol or diesel vehicles. This adjustment will apply to both new and existing electric, hybrid, and low-emission cars, vans, and motorcycles.

One of the most notable changes is the removal of the current VED Band A, which is currently set at £0 for electric and zero-emission vehicles. Vehicles that previously qualified for this band will now need to move to a band with a payable rate.

How the Changes Will Affect Your Vehicle:

Electric, zero, or low Emission cars registered on or after 1 April 2025:

• The first-year VED rate will be set at £10 for all electric, zero, or low-emission vehicles.
• From the second year onwards, the standard rate of £195 will apply.

Electric, zero, or low emission cars registered between 1 April 2017 and 31 March 2025:

• These vehicles will immediately pay the standard rate of £195 annually, starting from their first tax payment after 1 April 2025.

Electric, zero, or low emission cars registered between 1 March 2001 and 31 March 2017:

• These vehicles will move to the first band that has a VED value. For most vehicles in this category, this will be Band 1 at £20 annually.

Changes for hybrid and alternatively fuelled vehicles (AFVs)

• The current £10 annual discount for hybrid and alternatively fuelled vehicles will be removed.
• For vehicles registered before 1 April 2017, the rate will continue to depend on the vehicle’s CO2 emissions. You should check the current rates for these vehicles to see how much you will pay.
• For vehicles registered on or after 1 April 2017, the standard rate of £195 will apply.

Electric Vans

• Most electric vans will be subject to the standard annual rate for light goods vehicles, it’s important to check the current rates for these vehicles to understand what you will pay from 2025 onward.

Additional Rate (Expensive Car Supplement)

• Any new electric or zero-emission vehicles with a list price exceeding £40,000, registered on or after 1 April 2025, will attract the standard rate plus an additional "expensive car supplement" for the first five years of ownership. This supplement will apply from the start of the second licence period.

These changes are part of the government's effort to standardise vehicle tax and ensure that the tax system is fairer across different types of vehicles. If you're an owner of an electric or hybrid vehicle, it's essential to stay informed about these changes to ensure you're ready for the new tax structure starting 1 April 2025.