Insights

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 (up £10)
• This now includes electric vans