Electric vehicle (EV) owners in the UK are set to face Vehicle Excise Duty (VED), commonly known as road tax, from April 2026. This significant policy shift will end the current exemption for EVs, bringing them into the same tax framework as petrol and diesel cars. The move aims to create a more equitable and sustainable tax system as the number of electric vehicles on UK roads continues to rise.
Under the new rules, all electric cars, vans, and motorcycles registered from 1 April 2017 will begin paying VED. Specifically, EVs registered between 1 April 2017 and 31 March 2025 will initially pay the lowest first-year VED rate, currently set at £10. Following this, they will transition to the standard annual VED rate, which is presently £190. For electric vehicles registered from 1 April 2025 onwards, the standard first-year rate will apply, followed by the standard annual rate.
Furthermore, the 'expensive car supplement' will also extend to electric vehicles from April 2026. This supplement applies to vehicles with a list price exceeding £40,000 and means an additional annual charge for five years from the second year of registration. This particular charge currently stands at £410. The government's rationale behind these changes is to ensure that all motorists contribute fairly to the upkeep of roads, regardless of their vehicle's fuel type, as the transition to electric vehicles accelerates.
Prior to these changes, electric vehicles have enjoyed a complete exemption from VED, a policy designed to incentivise their adoption and support the UK's net-zero carbon emissions targets. However, as EV sales have surged, the Treasury has identified a growing gap in tax revenue traditionally generated by fuel duty and VED from conventional internal combustion engine vehicles. The introduction of VED for EVs is therefore a step towards addressing this fiscal challenge and ensuring a stable funding stream for public services.
These upcoming regulations were initially announced by Chancellor Jeremy Hunt in the Autumn Statement 2022. The government stated at the time that the move was necessary to make the motoring tax system fairer and to account for the increasing number of zero-emission vehicles. The RAC, a prominent motoring organisation, has provided a guide detailing these changes to help vehicle owners understand the implications for their future motoring costs.