Car Tax Changes Coming in April 2025: What You Need to Know
Big changes to car tax are coming in April 2025, and if you’re planning on getting a new vehicle, it’s important to know how this could affect you.
The government is introducing new rules that will impact electric vehicles (EVs) and low-emission cars. Let’s break down the key changes in simple terms.
Key Points at a Glance:
-
Electric cars registered on or after 1 April 2025 will pay £10 first-year road tax until 2029-30 (first-year road tax is based on emissions, and EVs fall into the lowest band).
-
Electric cars registered between 1 April 2017 and 31 March 2025 will pay the standard-rate road tax of £195 from 1 April 2025.
-
Electric cars registered between 1 March 2001 and 30 March 2017 will now pay £20 road tax a year.
-
The expensive car supplement (luxury car tax) now applies to electric cars registered on or after 1 April 2025, an extra £425 on top of standard-rate road tax from the second to the sixth year of registration.
-
Electric vans will now be charged £355 road tax each year, the same rate as petrol and diesel light goods vehicles.
What’s Changing?
From 1 April 2025, the standard road tax rate will be £195 for all cars registered after 1 April 2017: including petrol, diesel, hybrid, and electric vehicles.
Previously, this rate was £190 for petrol and diesel cars, with a £10 discount for hybrids and no charge for electric vehicles.
Electric vehicles and low-emission cars will also no longer be exempt from Vehicle Excise Duty (VED).
This means that if you own an EV or a hybrid, you’ll start paying car tax just like petrol and diesel vehicle owners. Here’s a detailed breakdown of the current and future first-year VED rates based on vehicle emissions:
| CO2 Emissions (g/km) | First-Year VED (Current) | First-Year VED (from April 2025) |
|---|---|---|
| 0g/km | £0 | £10 |
| 1-50g/km | £10 | £110 |
| 51-75g/km | £30 | £130 |
| 76-90g/km | £135 | £270 |
| 91-100g/km | £175 | £350 |
| 101-110g/km | £195 | £390 |
| 111-130g/km | £220 | £440 |
| 131-150g/km | £270 | £540 |
| 151-170g/km | £680 | £1,360 |
| 171-190g/km | £1,095 | £2,190 |
| 191-225g/km | £1,650 | £3,300 |
| 226-255g/km | £2,340 | £4,680 |
| 255+g/km | £2,475 | £5,490 |
Expensive Car Supplement: If your car costs over £40,000, including electric cars, there’s an additional annual charge of £425 from the second to the sixth year of registration.
Electric Vans: From April 2025, electric vans will be taxed at £355 per year, aligning them with the same rate as petrol and diesel light goods vehicles.
Extra Year of Free Road Tax for Your Electric Car
Want to save on road tax for a little longer? If you renew your electric car’s road tax before 1 April 2025, you can enjoy tax-free motoring until March 2026.
The process is simple: just head to the government’s online portal and use your number plate and the 11-digit reference number from your V5C log book to renew.
You may get a prompt asking if you’re sure about renewing early since it technically overlaps with your current road tax period, but since electric cars currently pay no road tax, you’re not doubling up on costs. This way, you save £195 for another year.
How This Affects You
If you’re considering switching to an electric or low-emission vehicle, now might be the perfect time to act before these changes take effect.
By leasing a vehicle through Premier Vehicle Leasing, you can take advantage of current tax benefits and drive a brand-new car without the worry of long-term commitments.
Plus, leasing gives you the flexibility to upgrade when newer, more efficient models hit the market, just like the above brand-new BYD Seal U, which you can enquire about today.
Get Ahead of the 2025 Tax Changes
Don’t wait for higher costs to kick in: explore our competitive leasing deals today and get behind the wheel of a low-emission or electric vehicle while the savings last.
Contact Premier Vehicle Leasing now to find your perfect car and avoid the upcoming tax increases!