Electric Car Road Tax 2025: Complete UK Guide to New EV VED Charges
Everything you need to know about electric car road tax from April 2025. New VED rates, £40k luxury car supplement, how much you'll pay, and should you buy before or after the changes.
Electric car road tax is changing dramatically from April 1st, 2025. For the first time since electric vehicles became mainstream, EV drivers will pay Vehicle Excise Duty (VED)—and if your car costs over £40,000, you could face a shock bill of £620 per year for five years.
This complete guide explains exactly what's changing, how much you'll pay, the critical £40,000 threshold trap, and whether you should buy your electric car before or after April 2025.
Quick Facts:
- April 1st, 2025 - Electric cars start paying road tax
- £195/year - Standard rate for most EVs
- £620/year - Rate for EVs over £40,000 (years 2-6)
- £3,100 - Total extra cost over 5 years for luxury EVs
- 70%+ of EVs - Cost over £40k, triggering higher rate
Last Updated: November 2025 | Reading Time: 11 minutes
What's Changing on April 1st, 2025?
The End of Free Road Tax for Electric Cars
Until March 31st, 2025, electric vehicles are exempt from road tax (VED). This zero-rate has been a major incentive for EV adoption.
From April 1st, 2025, this exemption ends completely.
The change affects:
- ✅ All new electric cars registered from April 1st, 2025
- ✅ All existing electric cars (registered before April 1st, 2025)
- ✅ Electric vans
- ✅ Electric motorcycles and tricycles
No electric vehicle escapes the new tax.
Why Is This Happening?
Government reasoning:
- Lost revenue - With EV adoption growing, government losing £billions in fuel duty and VED
- Road maintenance - EVs use roads but don't contribute to upkeep
- Leveling the playing field - Make EVs pay similar to petrol/diesel cars
- Announced in 2022 - Not a surprise, just now taking effect
The reality: As EVs become mainstream, government needs to replace lost petrol/diesel tax revenue. This is the first step.
How Much Road Tax Will Electric Cars Pay in 2025?
The amount depends on when your car was registered and how much it cost.
New EVs Registered on or After April 1st, 2025
If you register a new electric car from April 1st, 2025 onwards:
| Year | List Price Under £40k | List Price Over £40k |
|---|---|---|
| Year 1 (first payment) | £10 | £10 |
| Year 2 | £195 | £620 (£195 + £425 supplement) |
| Year 3 | £195 | £620 (£195 + £425 supplement) |
| Year 4 | £195 | £620 (£195 + £425 supplement) |
| Year 5 | £195 | £620 (£195 + £425 supplement) |
| Year 6 | £195 | £620 (£195 + £425 supplement) |
| Year 7+ | £195 | £195 (supplement ends) |
Total tax (first 6 years):
- Under £40k: £985
- Over £40k: £3,110 (£2,125 more)
Existing EVs Registered Between April 2017 and March 2025
If you already own an EV registered between April 1st, 2017 and March 31st, 2025:
From April 1st, 2025 onwards:
- Standard rate: £195 per year
- No first-year discount (you skip that)
- No expensive car supplement (even if your car cost over £40k when new)
Why no supplement? The expensive car supplement only applies to cars registered on or after April 1st, 2025. Existing EV owners are exempt from this additional charge.
Example:
- You bought a Tesla Model Y (£45k) in September 2024
- From April 2025: You pay £195/year
- Someone buys same car in May 2025: They pay £620/year (years 2-6)
- You save £2,125 over 5 years
Older EVs Registered Between March 2001 and March 2017
If you own an older EV registered between March 2001 and March 2017:
Current rate (until March 31st, 2025): £0 (Band A) New rate (from April 1st, 2025): £20 per year (Band B)
Still extremely cheap compared to petrol/diesel equivalents.
Electric Vans
From April 1st, 2025:
- Electric vans pay £335 per year
- Same as petrol/diesel light goods vehicles
- No exemption or discount
Electric Motorcycles and Tricycles
From April 1st, 2025:
- Taxed at the smallest engine size rate
- Currently £25 per year
- Still very affordable
The £40,000 Luxury Car Tax Trap
This is where many electric car buyers get caught out.
What Is the Expensive Car Supplement?
The Expensive Car Supplement (also called luxury car tax) is an additional £425 per year charge applied to any car with a list price over £40,000.
Key details:
- Applies to cars over £40,000 list price (not what you paid)
- Charged for 5 years (years 2-6 of ownership)
- Applies to petrol, diesel, hybrid, AND electric cars
- Total additional cost: £2,125 over 5 years
Has existed since 2017 but previously didn't affect EVs (they were exempt from VED entirely).
From April 2025, EVs are subject to this supplement.
Why This Matters for Electric Cars
The problem: The average electric car in the UK costs £48,000.
This means:
- 70%+ of electric cars cost over £40,000
- Most EV buyers will pay £620/year (not £195)
- This wasn't widely understood when the tax changes were announced
Examples of popular EVs over £40k:
| Electric Car | Typical List Price | Annual Tax (Years 2-6) |
|---|---|---|
| Tesla Model 3 Long Range | £46,990 | £620 |
| Tesla Model Y | £44,990 | £620 |
| Volkswagen ID.4 | £44,970 | £620 |
| BMW iX3 | £63,000 | £620 |
| Audi Q4 e-tron | £45,550 | £620 |
| Mercedes EQA | £51,000 | £620 |
| Polestar 2 | £44,950 | £620 |
| Hyundai Ioniq 5 | £46,745 | £620 |
| Kia EV6 | £44,995 | £620 |
Almost every mainstream EV triggers the supplement.
Electric Cars Under £40,000 (No Supplement)
Some manufacturers have adjusted pricing to stay under the threshold:
| Electric Car | List Price | Annual Tax (Years 2-6) |
|---|---|---|
| MG4 | £26,995-£36,495 | £195 |
| BYD Dolphin | £25,490-£33,490 | £195 |
| Vauxhall Corsa Electric | £31,900-£36,445 | £195 |
| Nissan Leaf | £28,995-£36,995 | £195 |
| Renault Megane E-Tech | £36,995-£39,995 | £195 (just under!) |
| Citroen e-C4 | £35,950 | £195 |
| Peugeot e-2008 | £35,550-£39,250 | £195 |
| MG ZS EV | £31,495-£34,995 | £195 |
Vauxhall announcement: In response to the tax changes, Vauxhall priced their entire electric range under £40k to help buyers avoid the supplement.
What Counts as "List Price"?
The £40k threshold is based on:
- Manufacturer's recommended retail price (MSRP)
- Including VAT
- Including optional extras fitted by manufacturer
- NOT including dealer-fitted accessories
Examples:
Scenario 1: Safe
- Base car: £38,000
- Dealer paint protection: £500
- Dealer mats: £150
- Total list price: £38,000 (accessories don't count)
- Annual tax: £195 ✅
Scenario 2: Caught
- Base car: £38,000
- Manufacturer metallic paint: £750
- Manufacturer upgraded wheels: £1,500
- Total list price: £40,250
- Annual tax: £620 ❌
Be very careful with factory options. That £750 paint upgrade could cost you £2,125 over 5 years.
Can You Appeal or Get a Refund?
No. The list price is fixed when the car is registered.
You cannot:
- ❌ Argue you paid less (discounted price)
- ❌ Remove factory options after purchase
- ❌ Appeal the threshold
- ❌ Get a refund if car value drops
It's based on list price at registration, permanently.
Is the £40k Threshold Being Raised?
Possibly, but not confirmed.
Current situation:
- The £40k threshold was set in 2017
- Has not increased despite inflation
- If adjusted for inflation: Would be ~£52,000 now
- Government has hinted at potential increase for EVs only
Letter from Minister for Future of Roads (Lilian Greenwood):
- Government "weighing up plans" to raise threshold for zero-emission vehicles
- No timeline or guarantee
- Political sensitivity around luxury tax
Our advice: Don't bank on this changing before you buy. Plan based on current £40k threshold.
Should You Buy Before or After April 1st, 2025?
This is the critical question for buyers considering an EV in early 2025.
If You're Buying an EV Over £40,000
Buy BEFORE April 1st, 2025:
Savings:
- No expensive car supplement (ever)
- Pay £195/year from April 2025 onwards
- Save £2,125 over 5 years (vs buying after April 1st)
Example: Tesla Model Y (£44,990)
| Purchase Date | Year 1 | Years 2-6 | Years 7+ | Total (6 years) |
|---|---|---|---|---|
| March 2025 (before) | £0 | £195/year | £195/year | £975 |
| May 2025 (after) | £10 | £620/year | £195/year | £3,110 |
| Difference | £2,135 saving |
If you're buying an expensive EV, buying before April 2025 saves over £2,000.
If You're Buying an EV Under £40,000
Timing matters less, but buying before still saves a bit:
Example: MG4 (£31,995)
| Purchase Date | Year 1 | Years 2-6 | Total (6 years) |
|---|---|---|---|
| March 2025 (before) | £0 | £195/year | £975 |
| May 2025 (after) | £10 | £195/year | £985 |
| Difference | £10 saving |
Minimal difference. Don't rush for a sub-£40k car.
Other Considerations Beyond Tax
Reasons to wait until after April 1st:
- Better deals - Dealers may discount to meet Q2 targets
- New models - 2025 model year cars with updates
- Government grants - Potential EV incentives to meet ZEV mandate (possible but not confirmed)
Reasons to buy before April 1st:
- Save £2,125 if buying over £40k car
- Better selection - Popular models in stock now
- Avoid rush - Everyone trying to beat deadline
- Lock in current pricing - Prices may increase
Our Recommendation
If buying an EV over £40k: Buy before April 1st, 2025 if possible.
- Savings are substantial (£2,125+)
- Exemption from supplement is permanent
- Worth rushing for
If buying an EV under £40k: Don't rush.
- Minimal tax savings
- Wait for best deal/model
- Buying in April/May might get better prices
If uncertain: Run the numbers with total ownership cost, not just tax.
How to Calculate Your Electric Car Road Tax
Step-by-Step Calculator
Step 1: When will you register the car?
- Before April 1st, 2025 → Go to Step 2
- On/after April 1st, 2025 → Go to Step 3
Step 2: Car registered before April 1st, 2025
Question: When was car originally registered?
-
Between April 2017 and March 2025:
- Answer: £195/year from April 2025 onwards
- No supplement, regardless of price
-
Between March 2001 and March 2017:
- Answer: £20/year from April 2025 onwards
Step 3: Car registered on/after April 1st, 2025
Question: What is the list price (inc. VAT and factory options)?
-
Under £40,000:
- Year 1: £10
- Year 2+: £195/year
- Total (6 years): £985
-
£40,000 or more:
- Year 1: £10
- Years 2-6: £620/year
- Year 7+: £195/year
- Total (6 years): £3,110
Real-World Examples
Example 1: Tesla Model 3 Long Range
- List price: £46,990
- Registration: May 2025
- Year 1: £10
- Years 2-6: £620/year = £3,100
- Years 7+: £195/year
- 6-year total: £3,110
Example 2: Nissan Leaf
- List price: £31,995
- Registration: May 2025
- Year 1: £10
- Years 2+: £195/year
- 6-year total: £985
Example 3: Existing Tesla Model Y (bought Sept 2024)
- Original list price: £44,990
- Registration: September 2024
- Until March 2025: £0
- April 2025 onwards: £195/year (no supplement!)
- 6-year total (2024-2030): ~£1,000
Example 4: MG4 with options
- Base price: £26,995
- Trophy trim: £31,995
- Metallic paint: £745
- List price: £32,740
- Under £40k: £195/year (years 2+)
How Electric Car Tax Compares to Petrol/Diesel
Many buyers assume EVs now pay the same as petrol cars. Not quite.
Comparison Table
New cars registered from April 1st, 2025:
| Fuel Type | List Price Under £40k | List Price Over £40k |
|---|---|---|
| Electric | Year 1: £10 Year 2+: £195/year |
Year 1: £10 Years 2-6: £620/year Year 7+: £195/year |
| Hybrid | Year 1: £110 Year 2+: £195/year |
Year 1: £110 Years 2-6: £620/year Year 7+: £195/year |
| Petrol/Diesel | Year 1: £220 Year 2+: £195/year |
Year 1: £220 Years 2-6: £620/year Year 7+: £195/year |
Electric cars still get advantage:
- Lower first-year rate (£10 vs £220)
- Same long-term rate (£195/year)
- Same expensive car supplement (if over £40k)
Savings over petrol/diesel (6 years, under £40k):
- EV: £985 total
- Petrol: £1,195 total
- EV saves £210
Not huge, but something.
How to Tax Your Electric Car
Taxing an EV follows the same process as any car in the UK.
When to Tax
New car from dealer:
- Usually taxed by dealer (6-12 months)
- Check before collection
- Confirm on V5C or tax confirmation
Used EV:
- Road tax doesn't transfer
- You must tax before driving
- Can do immediately online
Annual renewal:
- DVLA sends reminder
- Tax online, phone, or Post Office
- Can set up Direct Debit
How to Tax Online
Visit: gov.uk/vehicle-tax
You'll need:
- Vehicle registration number
- V5C reference number (or V5C/2 new keeper slip)
- Valid MOT (if 3+ years old)
- Debit/credit card
Takes 5 minutes. Instant confirmation.
Payment Options
1. Annual (cheapest)
- Pay once per year
- No surcharge
- Example: £195 once
2. 6-monthly
- Pay every 6 months
- 5% surcharge
- Example: £102.38 twice = £204.76/year
3. Monthly (Direct Debit)
- Pay monthly
- 5% surcharge
- Example: £17.06/month = £204.72/year
Annual is cheapest but monthly spreads cost.
SORN (Statutory Off Road Notification)
If your EV is off the road (not used on public roads):
You can declare SORN:
- No tax required
- Must be on private property
- Free to declare
- Valid until you tax the car
How to declare:
- Online: gov.uk/make-a-sorn
- Takes 5 minutes
- Confirmation instant
When does this apply?
- Classic/collector EVs stored
- Broken down awaiting repair
- Not in use for extended period
Government Revenue and the Future
Why Did EVs Get Free Tax?
Original reasoning:
- Encourage EV adoption (environmental benefit)
- Offset higher purchase prices
- Reward zero-emission choice
- Limited number of EVs (minimal revenue loss)
What changed:
- EV sales now 20%+ of new cars
- Government losing £billions in fuel duty
- Road maintenance costs rising
- Need to replace lost revenue
How Much Will Government Raise?
Estimates:
- 1 million+ EVs on UK roads currently
- Growing by 300,000+ per year
- At £195/year average: £195 million+ annually
- At higher supplement rate: £300-400 million
Still far less than:
- Fuel duty: £26 billion/year
- VED (all vehicles): £7 billion/year
This is just the start. More EV tax increases likely as adoption grows.
Will Electric Car Tax Increase Further?
Likely, yes.
Potential future changes:
- Higher standard rate - £195 could rise to £250-300
- Mileage-based charging - Pay per mile driven (under discussion)
- Public charging tax - VAT increase from 5% to 20%
- Removal of grants - Company car BIK, salary sacrifice benefits
Government must replace £26 billion in fuel duty as we go electric.
Our prediction: Electric car tax will gradually increase to match petrol/diesel levels over the next 5-10 years.
Frequently Asked Questions
Do all electric cars pay road tax from April 2025?
Yes. All electric cars registered before or after April 1st, 2025 will pay road tax from that date onwards. The exemption ends completely.
How much is road tax for electric cars?
It depends:
- Existing EVs (registered before April 2025): £195/year
- New EVs under £40k (registered after April 2025): £10 year 1, then £195/year
- New EVs over £40k (registered after April 2025): £10 year 1, then £620/year for 5 years, then £195/year
What is the £40,000 electric car tax?
The Expensive Car Supplement adds £425/year to any car (including electric) with a list price over £40,000. It's charged for 5 years (years 2-6), totaling £2,125 extra.
Will I pay the £40k tax on my existing EV?
No. The Expensive Car Supplement only applies to cars registered on or after April 1st, 2025. If you already own an EV (registered before April 2025), you pay the standard £195/year regardless of what it cost new.
Should I buy my electric car before April 2025?
Yes, if it costs over £40,000. You'll save £2,125 over 5 years by avoiding the Expensive Car Supplement.
Not urgent if under £40k - minimal tax difference.
Is the £40k threshold being increased?
Possibly, but not confirmed. The government has hinted at raising the threshold for electric vehicles only, but there's no timeline or guarantee. Don't rely on this when making your purchase decision.
Do hybrids pay the same as electric cars?
Almost. Hybrids pay slightly more in year 1 (£110 vs £10), but the same ongoing rate (£195/year). The expensive car supplement also applies if over £40k.
Can I avoid the tax by registering my car in March 2025?
Yes, if you complete registration before April 1st, 2025. The tax treatment is based on the registration date, not purchase date.
Be careful: Registration can take 1-2 weeks. Don't leave it until the last minute.
Does the £40k threshold include options?
Yes. The list price includes all manufacturer-fitted options (paint, wheels, tech packs, etc.).
No. It doesn't include dealer-fitted accessories added after manufacture.
How do I check my car's list price?
Check:
- Original purchase invoice
- Manufacturer's website (build and price tool)
- V5C logbook (sometimes shows)
- Contact manufacturer directly with VIN
Be accurate - £1 over £40k costs £2,125 extra.
Can I claim a refund if I don't use the roads?
Only if you declare SORN (Statutory Off Road Notification). The car must be kept on private property and not used on public roads.
If you drive it at all, you pay full tax.
Will electric vans pay road tax?
Yes. Electric vans pay £335/year from April 2025, the same as diesel/petrol light goods vehicles.
Do I need to pay tax if I lease my electric car?
Usually included in lease price. Most lease companies include road tax in monthly payments.
Check your lease agreement to confirm.
Summary: Electric Car Road Tax 2025
Key Changes from April 1st, 2025:
- All EVs pay road tax - Zero-rate exemption ends
- Standard rate: £195/year - For most electric cars
- Expensive car supplement: £425/year - For cars over £40k (5 years)
- Total over £40k car tax: £620/year - Years 2-6
- First-year rate: £10 - For new EVs registered after April 2025
The £40,000 Trap:
- 70%+ of electric cars cost over £40k
- Triggers extra £2,125 over 5 years
- Based on list price (inc. factory options)
- Cannot be appealed or refunded
Should You Buy Before April 2025?
- Yes, if over £40k - Save £2,125
- Not urgent if under £40k - Minimal difference
Existing EV Owners:
- Pay £195/year from April 2025
- No expensive car supplement (even if over £40k)
- Lucky you!
How to Tax:
- Online: gov.uk/vehicle-tax
- Phone: 0300 123 4321
- Post Office: In person
- Annual, 6-monthly, or monthly Direct Debit
The Future:
- Tax likely to increase further
- Mileage-based charging under discussion
- Government needs to replace fuel duty
Bottom line: Electric cars are no longer tax-free, and if you're buying an expensive EV (over £40k), the timing of your purchase could save or cost you over £2,000.
Next Steps
Before buying an electric car:
- Read: Electric vs Petrol vs Diesel Comparison
- Calculate: Setting Your Car Budget
- Understand: UK Car Finance Options
Understanding road tax:
- General guide: UK Car Tax Guide
- How to tax: How to Tax Your Car Online
After purchase:
- Complete: First Steps After Buying Your Car
- Register: Transferring Car Ownership
This guide will be updated as government policy changes. Bookmark for reference throughout your electric car journey.