One of the big benefits of electric vehicles – that helps keep running costs down – is they're exempt from many taxes, including road tax.
However, that's set to change next year, as zero-emission and low emission vehicles will have to start paying Vehicle Excise Duty (otherwise known as road tax) in the same way as internal combustion engine (ICE) vehicles do.
To make sure you don't get caught out, here's our guide for current and future EV owners - everything you need to know about road tax changes...
Why are VED rates changing for EVs and low emission vehicles?
The Government announced changes to VED in its Spring Budget in April. It was set out as a way to ensure all drivers begin to pay a fairer tax contribution.
Chancellor Jeremy Hunt justified the decision with forecasts from the Office for Budget Responsibility that put half of all new vehicles sold in 2025 as electric, so the change 'would therefore create a fairer motoring tax system'.
VED brought in £7.4 billion tax revenue for the Government in 2022/23 according to the House of Commons library. This is predicted to rise to £9.4billion by 2027/28.
When do the changes come in?
1 April 2025
How much VED will I have to pay?
This depends on when the low emission (hybrid and plug-in hybrid) or zero-emission car's registered.
New electric and low emission cars registered on or after 1 April 2025:
For the first year these cars will pay just £10. This will go up to the standard VED rate (that all other cars pay), which is currently £190, from year two.
EVs and low emission cars registered between 1 April 2017 and 31 March 2025:
Will have to pay the full VED rate (currently set at £190) from the get-go.
The standard rate of VED is subject to change for 2025, but no revision has been made.
Electric and low emission cars registered between 1 March 2001 and 31 March 2017:
Will move to the first band that has a VED value (as defined by the Department for Transport) which is currently £20.
Again, this rate is subject to change for 2025, but no revision has been given.
How to know if your car is low emissions?
If you're not driving a fully-electric (Battery Electric or BEV) but you car is low emissions, you might not be sure which VED band your motor falls into.
The easiest way to check is to look at the gov.uk website where the bands are set out, and then check the CO2 emissions for your car.
You can do this by using the Government's CO2 emissions checker tool. You don't have to have already bought the car; you can check new unregistered cars too.
0g/km applies to all zero emission EVs, while most plug-in hybrids (PHEVs) like the UK's best-selling Ford Kuga PHEV will be in the second CO2 emissions band of 1 to 50g/km of CO2.
For example, the 2024 Ford Kuga emits 25g/km of CO2, so a new Kuga PHEVs registered on or after 1 April 2025 it will only have to pay £10 for year one.
The second tax payment onwards will be £190 (or whatever the 2026 rate is set at).
Ford Kuga PHEVs registered before 1 April 2025 will have to pay £190 from year one.
What about alternatively fuelled vehicles (AFVs)?
Alternative fuels are defined by the government as 'fuel or power sources which serve, at least partly, as a substitute for fossil oil sources in the energy supply to transport'.
These include hydrogen, liquid or gaseous biofuels, synthetic fuels, compressed natural gas (CNG) and liquefied petroleum gas (LPG).
They offer a cleaner (and sometimes cheaper) substitute to petrol and diesel.
Up until this point AFVs received a £10 annual discount on VED, but this will be removed from 1 April 2025.
The rate you will pay for an AFV will depend on when the vehicle was first registered.
Registered before 1 April 2017: This rate will depend on the vehicle's CO2 emissions (use the same govt tool to check).
Registered on or after 1 April 2017: You'll pay the standard rate of VED (currently that £190 but it's subject to change for 2025).
Are motorcycles and vans subject to changes?
From 1 April 2025 zero-emission and low emission vans will move into the same flat rate VED bracket as petrol and diesel vans, which is currently £290 a year.
Motorbikes and tricycles will be taxed on the annual rate for the smallest engine size - which is currently £22 a year. These can be checked on the vehicle tax rates page.