UK EV Tax Changes 2026: What Every Electric Car Owner Needs To Know
Key Takeaways
- EVs registered from April 2025 pay the standard VED rate — currently £195/year
- EVs registered before April 2017 remain fully exempt from VED
- New EVs over £40,000 pay the Expensive Car Supplement — an additional £425/year for 5 years
- Company car BiK rates for EVs are also rising incrementally through to 2027/28
- Factoring VED into your total ownership cost is now essential when evaluating EVs
When you bought your electric car, the sums probably made sense: cheaper fuel, minimal servicing, and zero road tax. That last part no longer holds. As of April 2025, electric vehicles are subject to Vehicle Excise Duty for the first time — and if you're due for renewal soon, the change will land in your account before the end of the year.
For most EV owners, £195/year isn't going to break the bank. But for drivers who bought specifically because of the zero-VED benefit, it's an unwelcome shift — and one worth understanding properly so you can plan ahead.
What Changed, and Why
The VED exemption for electric vehicles was removed as part of the UK Government's 2022 Autumn Statement. The stated rationale: as EV adoption grows and petrol revenues fall, the shortfall needs to come from somewhere. EVs now share the road funding burden with every other vehicle type.
The VED Rates: Exactly What You'll Pay
- Registered after 1 April 2025: standard flat rate of £195/year from day one
- Registered 1 April 2017 to 31 March 2025: £10/year in year one, then £195/year from year two
- Registered before 1 April 2017: still fully exempt — no change
- Listed price over £40,000: add the Expensive Car Supplement — £425/year extra for years 2 through 6
A Tesla Model 3 Long Range listed at £42,990 now attracts £620/year in VED for its first five years. That's £3,100 over the supplement period — worth factoring in before you sign.
Does It Change The Case For Going Electric?
Honestly, for most drivers, no. A typical petrol car doing 10,000 miles/year costs £1,400–£1,800 in fuel alone. A comparable EV charged primarily at home costs roughly £400–£600. The fuel saving easily outpaces the new VED cost.
MOTR Insight
MOTR Insight: Your vehicle's registration date is shown in your MOTR profile. If your EV was registered between April 2017 and March 2025, your first renewal is £10 — but the second jumps to £195. Set a MOTR reminder before that second renewal so it doesn't arrive as a surprise.
What To Do Now
- 1Check your vehicle's registration date — it determines which rate applies
- 2Log into DVLA to confirm your next VED renewal date and amount
- 3Verify your vehicle is correctly taxed as electric — misclassification does happen
- 4Factor £195/year (or £620/year if over £40k) into your annual running costs budget
- 5Set a renewal reminder — missing VED is a fixed penalty of £80, rising to £160 if unpaid
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