Changes to vehicle tax on electric vehicles

From 1 April 2025, drivers of electric and low emission cars, vans and motorcycles will need to pay vehicle tax in the same way as it is currently applied to internal combustion engines (ICE).

This change will apply to both new and existing vehicles meaning all drivers will make a tax contribution, regardless of the CO² output of their vehicle. Of course the rate for zero and low emission vehicles will be proportionate against the tariffs for ICE.

This new measure effectively removes band A under the graduated VED system (currently £0). Vehicles in this band will now be moved into the first band where a rate becomes payable.

New registrations

Year one
Electric and low emission vehicles registered on or after 1 April 2025 will attract the lowest first year rate of vehicle tax (applied to CO² emissions 1 to 50g/km currently).

Subsequent years
From the second tax payment onwards, these vehicles will now attract the standard rate (£190 at time of print but subject to change for 2025).

Additional rate (commonly referred to as the expensive car supplement)
Electric vehicles with a list price exceeding £40,000 will now attract the expensive car supplement from the second tax payment onwards. This will apply to vehicles registered on or after 1 April 2025.

Existing vehicles

Zero and low emission vehicles registered between 1 April 2017 and 31 March 2025 will pay the standard rate for subsequent years RFL (£190 at time of print but subject to change for 2025).

The £10 annual discount for AFVs and hybrids will be removed, and the rate customers will pay will depend on when the vehicle was first registered. If the vehicle was:

Registered before 1 April 2017

This rate will depend on the vehicle’s CO² emissions (check the current rates for this vehicle)

Registered on or after 1 April 2017

The standard rate applies (£190 at time of print but subject to change for 2025).

We have recently communicated that any changes in the governments RFL pricing will be invoiced on the anniversary of the vehicle contract, meaning any existing monthly payments will remain unchanged with an additional annual invoice raised to cover any increases.