The UK government is bringing in new road tax rules starting on April 1, 2025. These updates will impact every car owner in the country—whether you drive a petrol, diesel, electric, or hybrid vehicle. This major change is part of a plan to make the car tax system more balanced and ensure everyone contributes fairly.
One of the biggest changes is for electric vehicle (EV) drivers. EVs have been free from road tax for years, but that’s about to change. Starting next year, even electric car owners will have to pay an annual fee. Hybrid cars will also lose their previous small tax discounts and pay the same rate as petrol and diesel vehicles.
The new rules are not just about charging more money. They are designed to push more people toward eco-friendly cars, raise funds for road upkeep, and make sure every road user pays their share. Whether you are planning to buy a new car or already own one, it’s important to understand how these changes affect you.
Why the Road Tax System Is Changing
There are a few key reasons why the UK is making these updates to Vehicle Excise Duty (VED):
- Fair Payment by All Drivers: With more people switching to EVs, fewer are paying car tax. The government wants everyone to help fund road repairs and maintenance, not just petrol and diesel drivers.
- Pushing Greener Choices: Higher taxes for high-polluting cars will encourage people to choose low-emission or cleaner vehicles.
- Maintaining Government Revenue: As petrol and diesel cars slowly fade out, the government needs new ways to make sure enough tax is still being collected for transport projects.
What Vehicle Owners Should Know
If You Own or Plan to Buy an Electric Vehicle
Electric cars will no longer be free from tax. From April 2025:
- New EVs will pay just £10 in the first year.
- Starting from year two, the fee jumps to £195 yearly.
- If your EV costs more than £40,000, expect an additional £425 fee for five years.
Example: If you buy an EV in May 2025 for £45,000, your first year tax will be £10. From the second year, you’ll pay £195 + £425 = £620 per year for five years.
If You Drive a Petrol or Diesel Car
Tax rates are going up, especially for high-emission vehicles.
- Cars with CO₂ emissions above 255g/km will face a £5,490 first-year tax.
- Even lower-emission models will see tax increases.
Example: A petrol car emitting 160g/km CO₂ will now be taxed £1,360 in the first year instead of £680.
If You Own a Hybrid Vehicle
The £10 discount for hybrids is being removed. Hybrid cars will now pay:
- The same first-year and yearly tax as petrol and diesel cars.
- £195 annually plus an extra £425 if the car’s value exceeds £40,000.
Example: A hybrid car that was paying £185 yearly will now pay £195.
Tips to Lower Your Tax Burden
- Own an EV Already? Renew your road tax before April 1, 2025, to enjoy one more tax-free year.
- Thinking of Buying an EV? Consider buying before April 2025 to avoid the new charges.
- Petrol/Diesel Owners: If possible, switch to low-emission models to lower your tax.
- Hybrid Owners: Get ready for higher tax rates by planning ahead.