New car tax changes will be 'significant' for over a million drivers

Experts are alerting drivers of a "significant shift" in car tax as new Vehicle Excise Duty (VED) changes are due to come into effect from April 1.

For the first time, owners of electric vehicles (EVs) will be required to pay standard VED rates alongside a first-year charge, bringing to a close a period of exemptions. Electric vehicle authorities from EVA England have highlighted the importance of understanding these upcoming changes to avoid being caught off guard.

With the updates less than three months away, many EV owners may still be oblivious to this significant policy alteration. EVA England has clarified: "From April 2025, electric vehicles (EVs) will no longer be exempt from Vehicle Excise Duty (VED), but will benefit from cheaper preferential first-year rates compared to their petrol and diesel counterparts."

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They added, "While this marks a significant shift for EV owners, it's important to understand what the VED changes mean in practice and how they'll affect both current and future EV drivers."

Over one million electric vehicle owners currently exist in the UK, according to estimates. As part of the changes, electric vehicles manufactured since 2017 will incur a standard £195 VED cost in parallel with petrol and diesel vehicle owners, reports the Express.

Nonetheless, EV owners will enjoy a considerable reduction on first-year tax rates, with VED bills set at only £10.

Owners of electric vehicles (EVs) valued at more than £40,000 are set for a rude awakening as they face the possibility of being hit with an additional Expensive Car Supplement (ECS) fee imminently. Compared to this, those driving brand-new petrol and diesel cars might find themselves forking out nearly £5,500 if they're behind the wheel of some of the most polluting models.

The situation for hybrid vehicle owners isn't much better; they're looking at increased annual Vehicle Excise Duty (VED) fees with the modest £10 annual discount being axed.

The pivot in policy comes after the Conservatives declared that electric vehicles would be subject to car tax - a move upheld by Labour since their ascension. Chancellor Rachel Reeves confirmed the new scheme during her Autumn Budget statement.

In clear terms, HM Revenue and Customs outlined: "From 1 April 2025, registered keepers of electric, zero or low emission cars, vans and motorcycles will need to pay vehicle tax in the same way as registered keepers of petrol and diesel vehicles."

Crucially, "This change will apply to both new and existing vehicles."