What's road tax?
Road tax or VED (which is the official term, standing for Vehicle Excise Duty) is a yearly tax paid by the owners of cars, motorbikes, vans, and other motor vehicles registered in the UK.
Why do we have to pay road tax?
The money road tax raises is paid directly into the central government fund, which is used for projects that benefit everyone, which include but aren't limited to works to maintain and improve the road network in the UK, including repairing potholes and upgrading motorways. Currently fully electric cars pay no road tax at all. They're zero-rated standard tax for both the first year and all subsequent years.
How's road tax calculated?
Road tax is calculated in 2 different ways and the way used depends on the car’s age:
- The road tax of cars registered after March 2001 is based on CO2 tailpipe emissions
- The road tax of cars registered before March 2001 is based on engine size
For this reason, electric cars are exempt from road tax due to their zero emissions and lack of engine. From 1st April 2025, these figures will change and the first band at £0 will cease to exist.
What's the change regarding road tax for electric vehicles?
From 1 April 2025, electric vehicles will be charged road tax.
Why's road tax being charged for electric vehicles?
Electric car owners have spent many years paying no road tax at all and therefore not contributing to the maintenance of the roads that they're driving on or other services that road tax contributes to. This isn't sustainable, particularly since electric vehicles will be comprising an ever increasing proportion of road users.
How much will my electric car cost to tax?
The amount of road tax depends on when the low-emission or zero-emission car is registered:
- New electric and low emission cars registered on or after 1 April 2025 will pay just £10 for the first year, rising to the standard VED rate, which is currently £190, from year 2.
- EVs and low emission cars registered between 1 April 2017 and 31 March 2025 will pay the standard £190 VED rate which is subject to change for 2025, but no revision has been made at the time of writing.
- Electric and low emission cars registered between 1 March 2001 and 31 March 2017 will become more expensive from April 2025 too and the annual rate of VED for cars registered between these dates, with CO2 emissions of up to 100g/km, will stop being free and rise to £20.
Are there any additional road tax charges for EVs in April 2025?
Yes, if your EV costs more than £40,000 when new, it'll be liable for the extra annual fee for years 2 to 6 that's payable for more expensive new cars. This is currently £390 a year, but is also likely to have increased by 2025.
What about hybrid car road tax?
From April 2025, hybrid cars will lose the £10 discount that currently applies to them on first and subsequent year fees, so they'll also pay the same as cars with petrol and diesel engines.
What are the road tax categories and payments currently?
The current road tax payments can be found on the government website here.