All change on the Road Tax front
Understanding the complex UK Vehicle Excise Duty (VED) or “Road Tax”
Vehicle Excise Duty (VED), commonly referred to as road tax, is a tax levied on vehicles used on UK roads. Historically, electric vehicles (EVs) have been exempt from this charge. However, from April 2025, changes to VED rules mean that EV owners will be required to pay road tax. Thank you Rachel from Accounts.
Are electric vehicles (EVs) exempt from road tax in the UK?
Yes, as of now, fully electric vehicles are exempt from paying VED. However, this will change from April 2025 when EVs will become subject to road tax like petrol and diesel cars.
How much road tax will electric vehicle (EV) owners pay from 2025?
From April 2025, EVs registered on or after April 1, 2017, will pay the standard annual rate of VED, which will be £195 per year from April 1st 2025. Plus cars over a £40,000 at purchase will also pay a Luxury Tax. – Yes all EB that code more than 40K will be forced to pay a bonus tax.
EVs registered between 1st March 2001 and 30th March 2017 will be subject to the reduced rate for older vehicles of £20 per year.
Vehicle registration date | Cost per annum |
|---|---|
Between 1 April 2017 and 31 March 2025 | £195** (standard VED rate) |
Before 1st April 2017 | £20 |
The Over £40,000 road tax!
New electric cars (registered on or after 1st April 2025) with a list price of £40,000 or more will also be subject to the expensive car supplement. This means an additional charge (£425 per year) will apply from the second to the sixth year of registration, bringing the total to £620 per year for that period. That’s every Tesla on the road in the UK. Shame on you Rachel.
List price | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 |
|---|---|---|---|---|---|---|---|
Less than £40,000 | £20 | £195** | £195 | £195 | £195 | £195 | £195 |
£40,000 and over | £20 | £620*** | £620 | £620 | £620 | £620 | £195** |
