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New car tax measures in place for EVs in 2025

Up until this year, EVs have enjoyed the benefits of not having to pay car tax (known as Vehicle Excise Duty or VED), unlike ICE and hybrid engine cars, but that’s about change.

In our latest article, the Johnsons team explain the full extent of the changes coming in and how they will impact you as an EV owner. Plus, we reveal how you can get ahead of the change!

What changes are coming to car tax?

From 1 April 2025, there are three significant changes coming into place in the VED system which will impact electric, zero- and low-emission vehicles, aligning them more closely with petrol and diesel vehicle tax rates.

  1. First-year tax for new EVs: New electric vehicles registered on or after 1 April 2025 will pay a first-year VED rate of just £10. From the second year onwards, the standard rate of £190 will apply.
  2. Existing EVs: For EVs registered between 1 April 2017 and 31 March 2025, owners will also pay the new standard rate of £190 from 1 April 2025.
  3. Removal of Band A: The government will remove Band A from the current VED system, which is typically reserved for vehicles with low CO2 emissions, such as EVs. Currently, EVs in Band A pay £0 in vehicle tax, but from 1 April 2025, these vehicles will be required to pay at least the first band where a rate is applicable.

What’s the financial impact for specific EV types?

Depending on your EV type and time of registration, your taxation will vary.

  • Electric, zero- or low-emission cars registered on or after 1 April 2025 – Your first-year tax will be £10, and from the second onwards it will be the standard rate of £190.
  • Electric, zero- or low-emission cars registered between 1 April 2017 and 31 March 2025 – You will pay the new standard rate of £190 from 1 April 2025.
  • Electric, zero- or low-emission cars registered between 1 March 2001 and 31 March 2017 – These vehicles will be moved to the first band that has a VED value and will start at £20.
  • Electric vans – Most electric vans will be taxed at the standard annual rate for light goods vehicles. We advise that users stay up to date with the current rates for these vehicles; you can find them out here.
  • Additional rate (expensive car supplement) – New electric and zero-emission vehicles registered on or after 1 April 2025, with a list price over £40,000, will be subject to the standard rate, along with an additional expensive-car supplement for the first five years, starting from the beginning of the second licence period.

Avoid the tax increase!

EVs are becoming more popular among car owners, and now’s the time to buy! The first quarter of 2025 is the ideal time to switch to an EV or upgrade your current model before the new costs take effect. Purchase before April to secure the final opportunity for a £10 road tax, saving you over £180 upfront.

Head down to Johnsons today to explore the full range and make your EV purchase.

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If you have any more questions about the tax changes, please don’t hesitate to get in contact with the Johnsons team who will happily assist you in any way they can.