How the Vehicle Excise Duty (VED) changes from 1 April 2025 will affect vehicles
From 1 April 2025, registered keepers of electric, zero or low emission cars, vans and motorcycles will need to pay Vehicle Excise Duty (VED, also known as car tax or road tax) in the same way as registered keepers of petrol and diesel vehicles. Announced in Autumn Budget 2024, this change will mean that electric vehicles registered will experience an increase in VED after 1 April 2025.
What’s changing
Electric, zero or low emission cars registered on or after 1 April 2025 will pay a first-year rate of £10, then the standard yearly rate (£195) from the second payment onwards.
Even if you register an electric vehicle between April 2017 and 31 March 2025, you’ll still need to pay the £195 yearly rate for your next tax renewal (after April 2025).
Plus, from 1st April 2025, zero-emission vehicles priced over £40,000 will incur an Expensive Car Supplement (currently £410) for the first five years.
Please contact the Leasepoint team for more information.
- Including expertise/insight on this change.
- Fact check all information.
- What’s the impact on leasing? Will this impact differ when buying outright?
- Any impact for salary sacrifice schemes?