From April 2025, electric car owners are paying road tax for the first time. Here’s what you’ll actually be charged, depending on what you drive.
The Basic Charge: £195 a Year for Most EVs
If you registered your EV from 1 April 2025 onwards, you’ll pay the standard rate of £195 per year from the second year of ownership. That’s about £16.25 a month. The first year is still free, which is why anyone who registered just before the deadline got one final year of zero VED.
This £195 rate is what the government calls the “standard rate” for alternatively fuelled vehicles. Petrol and diesel cars registered from April 2017 onwards pay £220 per year at the standard rate, so you’re saving £25 annually, or roughly £2 a month. Not life-changing, but not nothing either.
For context, a comparable petrol car like a Volkswagen Golf will cost its owner £220 per year in VED. A Nissan Leaf owner now pays £195. The gap is there, but it’s narrower than most people expected.
The Expensive Car Supplement: Where It Gets Painful
Here’s the bit that catches people out. If your EV had a list price over £40,000 when new, you’ll pay an additional £425 per year on top of the £195 standard rate. That’s a total of £620 annually, or about £52 a month, for years two through six of the car’s life.
This expensive car supplement applies regardless of how much you personally paid. Buy a £65,000 Polestar 3 that’s depreciated to £35,000 after three years? You’re still paying the supplement based on the original list price. It doesn’t matter if you bought it used.
The supplement drops off after the first five years of standard rate payments, which means after six years total (remember, year one is free). From year seven onwards, you’re back to just the £195 annual charge.
Real Examples Across the Price Spectrum
A new Nissan Leaf with a list price around £32,000 avoids the supplement entirely. You’ll pay nothing in year one, then £195 per year from year two onwards. Over six years, that’s £975 in total VED.
A Tesla Model Y Long Range, with a list price of around £52,000, triggers the expensive car supplement. Year one is free, then you’ll pay £620 annually for the next five years, dropping to £195 from year seven. Over six years, you’ll have paid £3,100 in VED.
A Polestar 3 Long Range Dual Motor at roughly £65,000 follows the same pattern as the Model Y. The supplement doesn’t scale with price once you’re over the £40,000 threshold. Whether your car cost £41,000 or £100,000, the additional charge is the same £425 per year.
Company Car Drivers: You’re Still Exempt
If you drive an EV through a salary sacrifice scheme or as a company car, your employer pays the VED, not you. And crucially, this doesn’t count as a benefit in kind for tax purposes. Your company car tax calculation, which is based on the car’s P11D value and the BiK percentage (still just 2% for pure EVs in the 2025/26 tax year), remains separate from VED entirely.
This means the VED changes don’t directly affect your take-home pay if you’re in a salary sacrifice arrangement. They might affect your employer’s costs, which could eventually feed into scheme pricing, but that’s a different calculation.
What If You Registered Before April 2025?
You’re still exempt. Cars registered before 1 April 2025 remain on the old system, paying zero VED for as long as you own them. This exemption stays with the car, so if you sell your pre-April 2025 EV to someone else, they won’t pay VED either.
This is why there was a scramble to register EVs in March 2025, particularly among private buyers looking at expensive models.
One Thing to Watch
The £40,000 threshold for the expensive car supplement hasn’t increased since it was introduced in 2017. With average new car prices rising and even mainstream family EVs like the Kia EV6 or Hyundai Ioniq 5 in well-specced trims nudging close to or over that line, more buyers are getting caught by it than the policy originally intended.
If you’re speccing a new EV that’s hovering around £39,000 to £42,000, it’s worth checking whether you can stay under the threshold by choosing a slightly lower trim level. The difference between a £39,500 car and a £40,500 car is £2,125 in VED over six years, which is considerably more than most optional extras are worth.