Road tax rules in the UK have changed, and they now affect more drivers than before. Updates introduced from April 2025 reshaped how Vehicle Excise Duty (VED) works, bringing electric vehicles and low-emission cars into the main tax system.
This guide explains the current UK road tax and VED rates, how tax bands work, and how these rules apply to petrol, diesel, hybrid and electric vehicles. It also looks at how recent Budget decisions affect costs now and in the years ahead.
If you own a car, are buying a used vehicle, or are planning ahead, understanding road tax rules helps you avoid unexpected costs and stay compliant on UK roads.
Table of contents
What changed with UK road tax from April 2025
From April 2025, the UK road tax system was updated, changing how Vehicle Excise Duty (VED) is charged for many vehicles.
The most significant change is that electric vehicles are no longer fully exempt from road tax. EVs now fall within the standard VED system, alongside petrol, diesel and hybrid cars.
Vehicles registered from 1 April 2017 onwards continue to follow a two-stage structure. The first-year rate is linked to CO₂ emissions, while a standard annual VED rate applies from the second year. This standard rate now applies to many electric and hybrid vehicles that were previously tax-free.
Another change affects higher-value vehicles. Cars with a recommended retail price above £40,000 may be charged an additional VED supplement for a fixed number of years. This rule now also applies to certain electric vehicles, even if they were bought at a discount.
VED rates and road tax bands explained
Vehicle Excise Duty (VED), often referred to as road tax, is calculated using a structured band system. The band that applies to a vehicle depends mainly on when it was registered and how much CO₂ it produces. Because the UK has changed how road tax works over time, different vehicles fall under different systems.
For cars registered from 1 April 2017 onwards, VED follows a standard structure. It is split into two parts:
- a first-year rate, which is based on CO₂ emissions
- a standard annual rate, which applies from the second year onwards
The first-year rate is designed to reflect environmental impact, while the standard rate is broadly the same for most vehicles, regardless of fuel type. This structure now includes petrol, diesel, hybrid and electric vehicles.
Cars with a manufacturer’s list price above £40,000 may pay an additional annual supplement for a fixed number of years. This is calculated using the official list price rather than the amount paid, which means discounted vehicles can still fall into this category.
Cars registered before April 2017 are taxed under an older road tax system. For these vehicles:
- VED is based entirely on CO₂ emissions
- there is no flat standard rate
- the price-based supplement does not apply
This is why some older vehicles can have lower road tax costs than newer cars with similar emissions. Official VED bands and road tax rates are set nationally and recorded by the DVLA, with details published through GOV.UK as part of the UK road tax framework.
Tax rates for Cars registered between 1 March 2001 and 31 March 2017
| VED Band | CO₂ Emissions (g/km) | Annual Rate |
| A | Up to 100g/km | £0 |
| B | 101-110g/km | £20 |
| C | 111-120g/km | £35 |
| D | 121-130g/km | £160 |
| E | 131-140g/km | £190 |
| F | 141-150g/km | £210 |
| G | 151-165g/km | £255 |
| H | 166-175g/km | £305 |
| I | 176-185g/km | £335 |
| J | 186-200g/km | £385 |
| K | 201-225g/km | £415 |
| L | 226-255g/km | £710 |
| M | Over 255g/km | £735 |
Cars registered from 1 April 2017 onwards
Vehicle type | First-year rate | Standard annual rate |
Petrol / diesel / hybrid | Based on CO₂ emissions | £195 |
Electric vehicles (EVs) | £10 | £195 |
From the second year onwards, most cars move onto the standard annual rate.
Electric cars Supplement VED rates
Vehicle list price | Extra annual charge |
£40,000 or less | £0 |
Over £40,000 | £425 per year (for a fixed period) |
Short summary for drivers
- Electric cars registered before April 2017 remain outside the standard VED system
- Electric cars registered between April 2017 and March 2025 now pay the standard annual rate
- Electric cars registered from April 2025 onwards follow the same VED structure as other vehicles
Drivers can review their road tax due and emission standards by checking car tax through websites that use official DVLA data, or by using the DVLA website directly. This can be useful when getting an overview of a used car and its tax position.
Autumn Budget update: road tax changes for UK drivers
The Autumn Budget announced in November 2025 did not introduce new VED rates or tax bands for the current system. Instead, it confirmed how existing road tax rules will apply over the next few years, with one confirmed change affecting electric vehicles.
What stays the same –
The Budget confirmed no changes to:
- current VED tax bands
- the standard annual VED rate (£195)
- first-year CO₂-based charges for petrol, diesel and hybrid cars
- existing road tax exemptions
These rules continue to apply under the UK road tax system unless changed in a future Budget.
Whats changing –
The one confirmed update relevant to this guide is:
- From 1 April 2026, the Expensive Car Supplement threshold for zero-emission vehicles will increase from £40,000 to £50,000
- This applies to EV licences first effective on or after 1 April 2026
- Petrol, diesel and hybrid vehicles remain subject to the £40,000 threshold
- The supplement amount remains £425 per year, charged for five years from the second year of registration
This means many electric cars priced between £40,000 and £50,000 will no longer face the additional VED charge from April 2026.
The government also announced wider motoring measures beyond VED, including EV mileage charging, Motability changes, fuel duty decisions and EV grants. These are covered separately in our Autumn Budget motoring update.
Frequently asked questions
No, car tax is not transferable to the new owner. The seller must cancel the tax and will get a refund for any full unused months. The buyer must tax the car before driving it.
When you sell your car, your VED (car tax) is automatically cancelled. The DVLA will send you a refund for any full remaining months. The new owner must tax the car before driving it away.
Yes. Even after paying road tax, electric cars usually cost less to run than petrol or diesel cars. Charging is cheaper than fuel, and EVs typically need less servicing and maintenance. For most drivers, these savings still outweigh the added road tax.
Making UK car data easy to understand, one blog at a time. As a part of CarAnalytics Content Team, she combines her SEO experts, data analysts, and digital writers dedicated to helping drivers make informed, confident car-buying decisions. She specialises in translating complex topics like MOT, write-off categories, and outstanding finance and more into clear, accessible guides.
From car tax a ULEZ rules to pricing trends and ownership tips, she covers every step of buying, selling, and owning a used car in the UK. Backed by real data and industry insight, she aims to give readers clarity, confidence, and peace of mind. When she’s not writing, she’s likely enjoying a quiet countryside drive.
