From 1st May 2026, electric cars registered from April 2025 onwards will start paying Vehicle Excise Duty for the first time. If you bought your EV in the past year, you’ve got about four weeks before your free ride ends. Here’s exactly what you’ll pay, and whether it actually changes the case for going electric.
The basic numbers
EVs registered between 1st April 2025 and 31st March 2026 will pay £10 for their first year of VED (the tax disc, essentially, though nobody calls it that anymore). From May 2026, they move to the standard rate, which currently sits at £195 per year.
EVs registered from 1st April 2026 onwards pay the standard rate from day one. There’s no first-year discount.
Cars registered before 1st April 2025 remain exempt from VED entirely. Yes, even when the 2026 changes kick in. If you took delivery of your EV in March 2025, you’ll never pay road tax on it.
The expensive car supplement
Here’s where it gets pricier. Any EV with a list price over £40,000 when new pays an additional £425 per year (at current rates) for five years, starting from the second time you tax it.
For an EV registered in April 2025, that means you’ll pay £10 in year one (April 2025 to April 2026), then £620 per year for the next five years (that’s £195 standard rate plus £425 supplement), then £195 per year after that.
Over ten years of ownership, that’s £4,295 in total VED. Or about £36 per month on average, though it’s front-loaded into years two through six.
For context, a new petrol VW Golf with a list price under £40,000 pays around £220 in year one, then £195 per year after. Over ten years, that’s £1,925. The EV pays more, despite producing no tailpipe emissions, because it probably cost more than £40,000 new.
Real-world examples
Let’s take three common scenarios, all assuming cars registered in April 2025 and calculated over a typical four-year ownership period.
Tesla Model 3 Long Range (£49,990 list price): £10 in year one, then £620 for years two through four. Total VED over four years: £1,870, or about £39 per month.
MG4 SE (£26,995 list price): £10 in year one, then £195 for years two through four. Total over four years: £595, or about £12 per month. The sub-£40,000 list price makes a substantial difference.
BMW iX xDrive50 (£99,995 list price): Same VED as the Tesla. The expensive car supplement is a flat rate, so a £50,000 car pays the same additional charge as a £100,000 car. Total over four years: £1,870.
Does it change the financial case?
For most buyers, not really. The VED changes add cost, but they don’t fundamentally shift the maths.
If you’re a company car driver on salary sacrifice, you’re already saving thousands per year through the 2% Benefit in Kind rate (which runs until at least April 2028). Adding £620 per year in VED for an expensive EV still leaves you considerably better off than driving an equivalent petrol car, where you’d pay both higher BIK and higher VED.
Cash buyers need to factor VED into total cost of ownership, but for most people the calculation comes down to fuel savings. At current rates, someone driving 10,000 miles per year saves roughly £900 to £1,200 annually on fuel by going electric rather than petrol (assuming home charging on a decent overnight tariff versus petrol at £1.35 per litre). The VED cost takes a chunk out of that saving, but doesn’t eliminate it.
PCP buyers will likely see VED rolled into monthly payments by dealers, adding perhaps £15 to £50 per month depending on the car’s list price. Worth considering, but unlikely to be the deciding factor when you’re already committing to three or four years of £300-plus monthly payments.
Should you rush to buy before April 2026?
If you’re genuinely in the market and planning to keep the car long-term, registering before 1st April 2026 saves you the first-year standard rate (currently £195). But that’s the only saving for an over-£40,000 EV. You’ll still pay the expensive car supplement from year two onwards.
For an under-£40,000 EV, buying before April 2026 means you get the £10 first-year rate instead of £195. Over ten years, you save £185 total. Not nothing, but not worth making a hasty decision over.
The big cutoff was 1st April 2025. Anyone who registered before then avoids VED entirely. That window has closed.
One practical consideration
If you’re choosing between two similar EVs and one sits just below £40,000 while the other is just above, the VED difference is £2,125 over five years (the period you’d pay the expensive car supplement). That might be worth considering, particularly if the cheaper car meets your needs. The MG4 Trophy at £36,495, for instance, looks considerably more attractive than a £42,000 alternative when you factor in five years of VED at different rates.
VED rates quoted here are current as of April 2026 and may change in future Budgets. The £40,000 threshold has remained static for several years despite inflation, which means more cars creep into the expensive car supplement each year. Check the current rates on the gov.uk website when you’re making your decision.