Vehicle Tax Rules Are Changing — What Does That Mean for You?

In the UK, most vehicles on the road must pay Vehicle Excise Duty (VED), commonly known as road tax. The amount you pay depends on factors like your vehicle’s age, emissions, and original price.

From April 2025, some important changes came into effect — especially for electric vehicle (EV) owners.

Road Tax

VED rates usually rise slightly each year in line with inflation, so many drivers will see small increases over time.

The biggest recent change is that electric vehicles are no longer exempt from road tax.

Previously, EVs paid £0 VED, which helped reduce running costs. Now:

New EVs registered from 1 April 2025

£10 for the first year, then the standard annual rate (currently £190)

EVs registered between April 2017 and March 2025

Now pay the standard annual rate (£190)

EVs registered before April 2017

Pay a lower rate under the older system

EV owners still need to tax their vehicle each year, even if the amount due is low.

If your vehicle cost more than £40,000 when new, you may also need to pay the expensive car supplement too

Vehicle tax can be paid all at once for the year or spread out, which gives you some flexibility when it comes to budgeting. It’s also something to keep in mind if you are still weighing up switching to EV.

You can take care of your vehicle tax and find out how much you need to pay here.

Person plugging a charger in to their EV

In the Future – Possible Pay-Per-Mile Charging

The government has discussed the idea of a road pricing system where drivers pay based on how many miles they travel. This is sometimes suggested as a long-term replacement for fuel duty as more people switch to electric cars.

The idea is to tax vehicles between 1.5p and 3p per mile travelled; the more you use the roads and the more you travel, the more it costs.

In theory, that means that you’d potentially pay less for a vehicle that wasn’t doing as many miles each year, perfect if you’re only really commuting or running errands. But if you’re a big fan of road trips, it could be a cost to keep in mind.

It’s important to note:

No national pay-per-mile system has been confirmed
There is no official start date

Details such as pricing and how mileage would be measured have not been decided

For now, it remains only a possibility for the future.

What Does This Mean for You?

Most drivers will see only small yearly increases in vehicle tax.

The biggest impact is on EV owners, who will now need to factor VED into their running costs, particularly if their car was expensive when new.

Electric vehicles can still be cheaper to run overall due to lower fuel and maintenance costs, but the gap between EVs and petrol or diesel cars is smaller than before.

If you are considering switching to an EV, it’s worth including vehicle tax in your long-term budget calculations.

Want to know more about EV? Check out some more of our blogs