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Vehicle Excise Duty Updates Impacting Road Users: New Car Tax Regulations in Effect
Millions of motorists are being alerted to significant Vehicle Excise Duty (VED) changes that have been implemented this month. These widespread car tax updates bring increased fees for owners of petrol, diesel, and for the first time, electric vehicles (EVs). The recent modifications mean that electric car owners, previously exempt, will now be subject to standard Vehicle Excise Duty charges alongside traditionally fueled vehicles. In an effort to inform drivers, the DVLA has issued guidance regarding these crucial car tax changes, ensuring road users are informed about the adjustments to vehicle taxation.
VED Changes for Electric Vehicles Explained
Previously, electric car owners benefited from an exemption from annual Vehicle Excise Duty. However, under the new regulations, EV owners are now required to pay VED, aligning them with owners of petrol and diesel cars. The DVLA has used social media platform X to communicate these alterations, stating: “Vehicle tax has changed for electric and low emission vehicles. See how these changes affect you.”
It’s important to note that the VED amount payable by electric car owners will vary based on the vehicle’s registration date.
VED Rates for Newly Registered Electric Cars
Electric vehicles registered from April 2025 onwards will experience a reduced first-year VED rate of just £10. Following the initial year, these vehicles will then transition to the standard VED rate from the second year onward. This standard rate, currently £195 (increased from £190), also applies to electric vehicles initially registered after 2017.
VED Rates for Older Electric Vehicles
Discounts are available for owners of older electric cars. EVs registered between 2001 and 2017 will be subject to a reduced flat rate of just £20 for Vehicle Excise Duty.
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In an online announcement, the DVLA clarified: “Electric, zero and low emission cars, vans and motorcycles are now subject to the vehicle tax rates that were introduced on 1 April 2025. This change applies to both new and existing vehicles.” The agency further emphasized, “The payable amount is determined by the vehicle type and its registration date.”
Expensive Car Supplement: Additional Costs for Premium EVs
Many electric car owners may also encounter an additional charge of £425, representing a substantial financial impact. This extra expense is due to the Expensive Car Supplement (ECS).
Understanding the Expensive Car Supplement (ECS)
The Expensive Car Supplement is an extra fee levied between the second and sixth years for new electric vehicles registered after April 2025 that have a list price exceeding £40,000. Given the generally higher purchase price of electric vehicles, a significant number could surpass this threshold, pushing the total annual car tax bill to £620.
The DVLA has specified: “New electric and zero-emission vehicles registered on or after 1 April 2025 with a list price over £40,000 will incur the standard rate, in addition to the expensive car supplement for the initial 5 years, commencing from the second licence year.”