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Vehicle Excise Duty Changes 2025
3 min to readDriving
The Government are making significant changes to vehicle tax. We’ve outlined the major changes to help you understand the impact on you.
The Government are making significant changes to vehicle tax. We’ve outlined the major changes to help you understand the impact on you.
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Vehicle Excise Duty (VED) is a tax on vehicles charged depending on the vehicle type and first registration date. You may also know it as Road Tax or Road Fund Licence.
- Electric vehicles no longer exempt from VED
- In the first year of registration, cars will pay the lowest first year rate, currently £10, and vans will pay the standard rate, currently £345.
- After that, the standard rate will be charged on the vehicle’s registration anniversary. Currently, this is £195 for cars and £345 for vans for the tax year 2025/26, and this increases annually in line with inflation.
- Expensive Car Supplement
- This has been applied to petrol and diesel cars with a list price of over £40k since 2017.
- From April 2025, new electric cars will also attract the supplement.
- It is payable in years two to six and is in addition to the standard VED charge.
- In 2025/26 the supplement will be set at £425 per year.
- It is not being applied to vans.
- Increased VED rates for all cars with emissions over 1g/km
First year of registration rates:
- Double for cars with 76 grams or more of CO2per kilometre
- Increase by £100 for cars with between 1g and 75g of CO2per kilometre.
- Hybrids - including Plug ins - have tax benefits removed
The government have cancelled the £10 discount on the standard rate for hybrid vehicles.
VED and Expensive car supplement at a glance
Vehicles registered after 1 April 2025
| Vehicle | VED first year | VED second year onwards | Expensive car supplement |
|---|---|---|---|
| Electric cars over £40k | New: £10 in year one | New: Standard car rate (£195) | New: £425 |
| Electric cars under £40k | New: £10 in year one | New: Standard car rate (£195) | x |
| Electric vans | New: Light goods vehicles (£345) | New: Light goods vehicles (£345) | x |
| Hybrid, Petrol or Diesel cars under £40k | Increase: £100 or doubled | New: Standard car rate (£195) | x |
| Hybrid, Petrol or Diesel cars over £40k | Increase: £100 or doubled | New: Standard car rate (£195) | £425 |
Where vehicles are quoted and ordered in 2025, if your vehicle is delivered after 1 April 2025 you will be charged the new tax rates.
- If delivery is before 1 April, we’ll either adjust your contract to reflect the 24/25 tax rates when we set it live or refund the difference.
If you quoted and ordered in 2024 your quote was based on 24/25 rates, meaning:
- If delivery is after 1 April, we’ll need to recharge the increased VED charge, including in the first year
- If delivery is before 1 April, you won’t need to do anything.
Vehicles already on the road
The following VED charges will be applicable in the 2025/26 tax year.
| Vehicle | Renewal VED | Expensive car supplement |
|---|---|---|
| Electric Vans | New: Light goods vehicles (£345) | x |
| All fully electric cars | New: Standard car rate (£195) | x |
| Hybrid, Petrol or Diesel cars under £40k | New: Standard car rate (£195) | x |
| Hybrid, Petrol or Diesel cars over £40k | Standard card rate (£195) | £425 |
| Hybrid, Petrol or Diesel vans | Euro4/5 van rate £140 or Light goods vehicles at £345 | x |
The detail
First year VED rates for cars in 2025/2026*
| Petrol, hybrid, electric, Euro 6d diesel | |||
|---|---|---|---|
| CO2 emissions (g/km) | Change (g/km) | April 2025 | Uplift |
| --- | --- | --- | --- |
| 0 | +£10 | £10 | £10 |
| 1-50 | +£100 | £110 | £100 |
| 51-75 | £100 | £130 | £100 |
| 76-90 | Doubled | £270 | £135 |
| 91-100 | Doubled | £350 | £175 |
| 101-110 | Doubled | £390 | £185 |
| 111-130 | Doubled | £440 | £220 |
| 131-150 | Doubled | £540 | £270 |
| 151-170 | Doubled | £1,360 | £680 |
| 171-190 | Doubled | £2,190 | £1,095 |
| 191-225 | Doubled | £3,300 | £1,650 |
| 226-255 | Doubled | £4,680 | £2,340 |
| Over 255 | Doubled | £5,490 | £2,745 |
*increases annually in line with inflation
First year VED rates for vans
- All new vans will pay £345 (increased by £10)
- This now includes electric vans
Published at 11 February 2025
11 February 2025
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