UK Electric Vehicle Tax Changes – What You Need to Know

The Autumn Budget 2025 introduces significant changes to how electric vehicles (EVs) are taxed in the UK. These reforms will affect both private motorists and businesses operating company cars or vehicle fleets. With new charges coming into force from April 2025 and further changes from 2028, now is the right time to review how these updates may impact your costs and planning.

Standard road tax for EVs from April 2025

From 1 April 2025, electric vehicles will no longer be exempt from Vehicle Excise Duty (VED). EVs will instead be taxed in the same way as petrol and diesel vehicles. The amount payable will depend on the vehicle’s VED band and its date of first registration, so individual charges may vary. Owners should check the specific rate that applies to their vehicle to avoid unexpected costs.

Mileage-based tax from April 2028

Looking further ahead, the government will introduce a new mileage-based charge known as electric Vehicle Excise Duty (eVED) from 1 April 2028. This will apply to both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), in addition to standard VED.

• BEVs: 3p per mile

• PHEVs: 1.5p per mile

For drivers covering high annual mileage, this will represent a meaningful additional cost and should be factored into long-term budgeting.

Changes to the Expensive Car Supplement

There is some positive news for higher-value EVs. From April 2026, the threshold for the Expensive Car Supplement (an additional VED charge on higher-value vehicles) will increase to £50,000 for electric cars. This change means some higher-spec EVs will become more tax-efficient than they would have been under the previous rules.

What this means for drivers and businesses

For private drivers, the key takeaway is that EV ownership will no longer be road-tax free, and future mileage will directly influence tax costs. For businesses and fleet operators, these changes make it even more important to review the total cost of ownership when purchasing or leasing vehicles, taking into account VED, eVED, and mileage assumptions.

Planning ahead

EV taxation is evolving, and forward planning is essential. Understanding how these changes affect your personal or business vehicles will help you avoid surprises and make informed decisions.

If you would like to review your vehicle or fleet costs in light of the new rules, speak to us or your fleet manager to ensure your plans remain tax-efficient under the updated framework.