There are big changes and costs coming into effect from next Monday and some EV drivers will find themselves being taxed for the first time while others will see road tax double overnight.
Richard Evans, webuyanycar’s head of technical services said, “The tax changes indicate that the cost of electric motoring is set to rise. However, EV drivers are currently free from road tax and can avoid any charges for a further year –but time is running out!
“You can re-tax your car at any time, even if your current cover isn’t due to expire for months. So, if you re-tax your EV before 31 March you can enjoy another year’s tax-free motoring. Since EVs are tax exempt(until the end of March renewing early costs nothing – and saves you £195!
“Despite the changes and increases across the board, EV drivers will still have the most favourable road tax rates from April 2025. The £10 showroom tax for new EV buyers is small compared to the rates for low and higher-emission models.
“Once the changes take effect, owners of EVs first registered before April 2017 will have the cheapest annual road tax rate of all at just £20. This makes older EVs an attractive option for budget used car buyers looking to save on running costs.
“Meanwhile, road tax rates for cars producing over 76 g/km of CO2 are set to double. So, if you buy a new luxury or performance car in the highest emissions band from 1 April, you’ll face a £5,490 first-year road tax bill. Therefore, if ownership costs are a concern, it pays to opt for a greener motor.”
Key car tax changes for 2025/26 explained
The following car tax changes will come into effect from 1st April 2025:
New standard road tax rate
The standard annual road tax rate will increase from £190 to £195. This new rate will apply to all cars first registered between 1 April 2017 and 31 March 2025.
New taxes for EVs
- Road tax exemption for all EVs will end on April 1st 2025. Until this change comes into effect, EVs are exempt from all road tax, but must still be registered.
- New EVs registered from 1st April 2025 will be taxed £10 in the first year (also known as the ‘showroom tax’).
- Any EVs registered from 1st April 2025 with a list price exceeding £40,000 will be liable to pay the ‘expensive car supplement’ – an additional £425 per year between the second and sixth years of ownership.
- EVs registered between 1st April 2017 and 31st March 2025 will pay the standard rate road tax (set to rise to £195 per year).
- However, all EVs registered before 31st March 2017 will pay a lower annual rate of £20.
- The £10 annual discount on the standard rate road tax for alternative fuel vehicles, including hybrid, bioethanol, and liquefied petroleum gas (LPG) cars will also be discontinued from April 1st 2025, meaning affected drivers will pay the new standard £195 annual rate.
- Electric vans will also be taxed at an annual rate of £355 – the same rate levied on petrol and diesel light goods vehicles.
Tax rises for low-emission vehicles
- First-year road tax for low-emission vehicles producing between 1 and 50 g/km of CO2 will rise to £110. Until the change comes into effect, hybrid cars in this band (which includes most plug-in hybrids) pay no road tax in the first year, whilst petrol and diesel cars in the same band paid £10.
- First-year road tax for new cars emitting 51-75 g/km will rise to £135. The previous rate for cars in this band was £20 for hybrids and £30 for petrol and diesel cars.
Doubling first-year rates for higher-polluting new cars
- From 1st April, the first-year rate for cars in all other road tax bands producing 76g/km or more will double.
- This means new cars in the highest band producing 255g/km or more will pay £5,490 in the first year.
- The highest rate will apply to 59 new models from 24 car manufacturers, such as Bentley’s Continental W12, Porsche’s 911 Turbo, and Land Rover’s Defender V8.
