From April 2025, sweeping changes to the UK’s car tax system are coming into force affecting thousands of drivers, including older motorists and electric vehicle (EV) owners. These updates mark a major shift in the government’s vehicle taxation policy, particularly impacting people who have, until now, enjoyed reduced or zero vehicle excise duty (VED) obligations.
With electric vehicles previously exempt from most forms of road tax and many older drivers relying on tax breaks or fixed income budgeting, these reforms represent a new financial consideration on the road.
In this guide, we’ll break down what’s changing, who is affected, and how you can prepare, so you’re not caught off guard when the new rules hit.
How Much Tax Do You Pay on a New Car in the UK Under the 2025 Rules?
The amount of tax you’ll pay on a new car from April 2025 depends on:
- Type of car (electric, hybrid, petrol/diesel)
- First registration date
- List price (especially if it’s over £40,000)
Breakdown of New Car Tax for 2025
| Car Type | First-Year VED (2025) | Annual Standard Rate (from year 2) | Expensive Car Supplement (if over £40,000) |
| Fully Electric | £10 | £195 | £355/year (5 years from year 2) |
| Petrol/Diesel | Based on emissions (up to £2,745) | £190–£600+ depending on emissions | £355/year (if over £40,000) |
| Plug-in Hybrid | £10–£105 (depending on CO₂) | £170–£195 | £355/year (if over £40,000) |
Additional Costs
- VAT: 20% on the purchase price (included in most on-the-road prices)
- Registration Fee: £55 (one-time)
It’s worth using the DVLA vehicle tax rate tool to estimate your specific VED costs based on your vehicle.
What Are the New Car Tax Changes in the UK to Affect Electric Vehicle Drivers from April 2025?
The most notable change is that, starting 1 April 2025, electric vehicles will no longer be exempt from Vehicle Excise Duty (VED).
Currently, fully electric cars are “free-to-tax” although drivers are still legally required to register for tax. But that’s about to end.
- All electric vehicles registered from April 1, 2025, will begin paying £10 in the first year, then the standard £195 annually from the second year.
- Electric vehicles registered between April 1, 2017 and March 31, 2025, will also start paying £195 per year.
- Older EVs registered between March 1, 2001 and March 31, 2017, will pay £20 per year.
- The Expensive Car Supplement (previously waived for EVs) will now apply to any vehicle over £40,000, adding £355 per year for five years to the tax bill.
This means some Electric Vehicle owners could face up to £620 per year in car tax especially for premium electric models.
What Is the New Tax Law for Electric Cars in the UK?
The new tax law is part of the government’s broader plan to ensure fairness as EV ownership rises. As electric cars become mainstream, their exemption from tax no longer aligns with the government’s need to fund infrastructure and road maintenance.
Under the new law:
- New EVs (registered from April 2025) will pay a first-year VED of £10, followed by the standard rate of £195 per year.
- Existing EVs (registered between April 2017 and March 2025) will transition directly to the standard rate.
- EVs registered before April 2017 fall into existing emissions bands, with most moving into a £20 per year payment bracket.
This puts EVs on a level playing field with petrol and diesel cars, at least in terms of road tax.
Will Electric Vehicle Drivers Have to Pay Road Tax for the First Time in the UK?
Yes – for the first time, electric vehicle drivers will begin paying VED from April 2025.
Previously, EVs were completely exempt from this duty to encourage early adoption. However, the surge in EV ownership has prompted the government to phase out these incentives.
According to the Society of Motor Manufacturers and Traders (SMMT), EV registrations increased by 41.6% in January 2025 alone. This widespread adoption has influenced the shift in taxation policy.
How Much Will Road Tax Be on Electric Cars in 2025 in the UK?
Here’s a breakdown of how much EV owners can expect to pay based on the age and value of their vehicle:
| Vehicle Type | Registration Date | First-Year VED | Annual Standard Rate | Expensive Car Supplement |
| Fully Electric | After 1 April 2025 | £10 | £195 | £355 (if over £40,000) |
| Fully Electric | April 2017–March 2025 | N/A | £195 | £355 (if over £40,000) |
| Fully Electric | 2001–2017 | N/A | £20 | N/A |
| Plug-in Hybrids | Varies | Based on CO₂ Emissions | Based on CO₂ Band | If over £40,000 |
Note: The expensive car supplement applies for five years starting from the second tax year.
How Will the New UK Car Tax Changes Impact Older Drivers and Pensioners?
Older drivers, especially those on fixed incomes or relying on benefits, may find the new tax structure more burdensome.
- Older petrol/diesel vehicles are likely to fall into higher VED bands due to poorer emissions ratings.
- Many senior drivers own vehicles that were previously low-tax or tax-free this could now change.
- There may be exemptions for drivers receiving disability-related benefits or who meet certain age and mobility criteria.
It’s crucial for older drivers to check their VED band using the DVLA’s vehicle tax checker and see if they qualify for 50% reduction or full exemption.
Is Car Tax Going Up for Older Cars in the UK?
Yes, for many. Older combustion engine vehicles, especially those registered before 2017, often have higher CO₂ emissions, placing them in more expensive tax bands under the VED system.
So, if you’re still driving a 2005 petrol hatchback or an early 2010s diesel, be prepared for higher tax rates potentially £200 to £600+ annually depending on emissions and original list price.
At What Age Do UK Cars Become Tax Exempt?
A car becomes exempt from VED once it reaches 40 years old, provided it’s registered as a historic vehicle with the DVLA.
For Example:
- A car registered in 1985 would become tax exempt in 2025.
- You must still apply for exemption and have an MOT, unless the car is also MOT-exempt.
Does Car Tax Change with Ownership in the UK?
Yes. Car tax does not transfer between owners.
When you buy or sell a car:
- The previous owner gets a refund for remaining tax months.
- The new owner must tax the vehicle immediately, even if it was taxed by the seller.
This applies to all cars, including EVs, under the updated 2025 tax rules.
What Are the New Car Tax Changes to Be Implemented from April 2025 in the UK?
Here’s a summary of the reforms being implemented:
- Electric cars lose tax exemption
- Standard VED rate of £195 applies to most
- £10 first-year rate for new EVs
- Expensive Car Supplement of £355/year for EVs over £40,000
- Changes apply from 1 April 2025
These updates are designed to align with growing EV adoption and ensure a fair tax structure.
What Are the Vehicle Tax Rules for Electric and Low Emission Cars, Vans, and Motorcycles from April 2025?
As of 1 April 2025, the UK government has implemented new vehicle tax rules that end long-standing tax breaks for electric, zero, and low-emission vehicles. These changes now apply to both new and existing electric and alternatively fuelled vehicles (AFVs), including vans and motorcycles.
Electric, Zero or Low-Emission Cars
The VED you’ll pay depends on when your vehicle was registered:
| Vehicle Type | Registration Period | First-Year Rate | Ongoing Annual Rate |
| New EVs (post-April 2025) | On or after 1 April 2025 | £10 | £195 (from second year onward) |
| Existing EVs | 1 April 2017 – 31 March 2025 | N/A | £195 |
| Older EVs | 1 March 2001 – 31 March 2017 | N/A | £20 |
How Do I Claim My 50% Road Tax Reduction in the UK?
Some drivers are eligible for reduced road tax (50%) if they receive specific disability benefits.
You may qualify if you
- Receive PIP (Personal Independence Payment)
- Get the Higher Rate Mobility Component of DLA
- Are registered blind (severely sight impaired)
- Get War Pensioners’ Mobility Supplement
To claim
- Use your vehicle log book, DVLA reminder letter, or the green new keeper slip to apply.
- Submit the application through the DVLA website or at a post office that deals with vehicle tax.
How Can UK Drivers Prepare for the Upcoming Vehicle Tax Changes?
Here are a few actionable steps to help you navigate the upcoming changes:
- Check your current tax band using vechicle registration number online
- Plan ahead if you’re thinking about buying an EV buying before April 2025 could delay higher costs
- Review fuel efficiency and emissions for your current car
- Consider selling or trading in high-value EVs before the Expensive Car Supplement hits
- Talk to your dealership for upcoming model changes or incentives
What Will Be the Long-Term Impact of New Road Tax Rules on the UK’s Green Strategy?
While some critics argue these tax changes could slow EV adoption, others say it’s a logical step as electric vehicles become the norm.
The government claims this approach will:
- Level the playing field between petrol, diesel, and electric vehicles
- Encourage responsible vehicle ownership
- Help fund infrastructure improvements
- Still maintain some incentives for low emission vehicles
Only time will tell whether this slows or accelerates the UK’s Net Zero ambitions.
Conclusion
The new car tax changes in the UK will affect older drivers and electric vehicle owners more than any reform in recent years. From April 2025, what was once a tax-free or low-cost experience particularly for EV owners and pensioners will now come with an annual financial commitment.
These updates reflect the government’s intent to equalise taxation across all vehicle types, regardless of fuel source. For electric and low-emission drivers, the end of tax exemptions marks a turning point in ownership costs. For older motorists many of whom rely on fixed incomes the new VED rules may require thoughtful budgeting and forward planning.
FAQs About New Car Tax Changes in the UK
Are hybrid cars also affected by the 2025 car tax changes?
Yes, plug-in and hybrid vehicles may see higher VED rates depending on emissions and registration dates. They’re not exempt unless very low-emission and within older bands.
Can I still buy a tax-free electric car before April 2025?
Yes, EVs registered before April 1, 2025, will enjoy a temporary advantage, but they’ll still begin paying standard rates from that date.
Will this affect company car tax on EVs?
Company car tax (BIK) is separate from VED but is also changing gradually. EVs still enjoy lower BIK rates, but they’re rising annually.
Is the Expensive Car Supplement new?
No, it already exists for combustion vehicles but was waived for EVs. From April 2025, it applies to all cars over £40,000, including electric ones.
Can classic cars avoid the new tax rules?
Yes, vehicles over 40 years old and registered as “historic” are exempt, regardless of fuel type.
Is there financial support for pensioners affected by these changes?
While there’s no direct support linked to the tax change, pensioners with disabilities may qualify for tax reductions or exemptions.
Where can I get help calculating my new VED?
Use the official DVLA VED calculator or consult your local dealership.
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