UK Ends Electric Vehicle Tax Exemptions Under New VED Rules

EV owners now face annual charges starting at £195, with higher costs for vehicles priced above £40,000, as new tax policies take effect.

As of March 31, 2025, electric vehicles (EVs) are no longer exempt from vehicle excise duty (VED), marking a major policy shift in the UK.
EV owners will pay a standard annual VED rate of £195 starting in the second year of registration, with an additional £425 supplement for vehicles priced over £40,000.
The £40,000 threshold for the 'expensive car supplement' has been criticized as outdated, disproportionately affecting EVs due to their higher upfront costs.
Critics, including the Energy and Climate Intelligence Unit, warn the changes could discourage EV adoption at a critical stage in the UK's transition to zero-emission vehicles.
The Treasury defends the policy as a measure to ensure fiscal stability while maintaining incentives like frozen first-year VED rates for EVs.