As the world steers towards a greener future, governments worldwide are implementing measures to incentivize eco-friendly practices. From April 1st, 2025, Electric vehicles will be subject to Vehicle Excise Duty (VED).
Keep reading to find out what this means for you, your pocket and the planet. Also, some tips on how you can avoid this until April 2026 or avoid it completely!
Who is likely to be affected?
Whether you’re a proud owner or eyeing an electric ride for the future, the new VED regulations will affect you. From individuals to organizations, anyone who owns an electric car, van or motorcycle will be affected by this new measure.
Understanding the changes
This measure was announced during the Autumn Statement 2022 as part of the government’s broader strategy to tackle climate change and promote green initiatives.
This measure aims to equalise the playing field between zero emission and international combustion engine vehicles. Starting in in April 2025, zero emission cars, vans and motorcycles face a new tax landscape.
The Details:
This new measure effectively removes Band A under the graduated VED system (for cars registered on or after 01/03/01 and before 01/04/17 with CO2 emissions). What does this mean? Band A rate is currently £0, these vehicles will now be required to move to the first band where a rate becomes payable – in this case Band B.
- Zero-Emission cars registered on or after 1st April 2025 will be liable to pay the lowest first year rate of VED (Currently £10 a year)
- From the second year of registration onwards, they will move to the standard rate (Currently £180 a year)
- Most zero emission vans will move to the standard annual rate for petrol and diesel light goods vehicles. (Currently £290 a year for most vans)
- Zero emission motorcycles and tricycles will move to the annual rate for the smallest engine size. (Currently £22 a year)
- Rates for other alternatively fuelled vehicles (AFVs) and hybrids will also be equalised by removing the £10 annual discount.
How can you avoid this?
To avoid this until April 2026 you can renew your car tax now (before the end of March!), yes, even if it’s not due!
Here’s how:
- Enter the vehicles registration number and 11-digit V5C number.
- Confirm vehicle details.
- Proceed past “vehicle is currently taxed” notice.
- Follow prompts to complete the process.
Alternatively, leasing an electric or hybrid vehicle with us means you won’t be subject to paying VED on the leased vehicle at all!
With change on the horizon, it’s time to embark on the drive towards sustainability. From tax adjustments to environmental impact, every step counts to make our roads cleaner, greener, and brighter.
Want to explore electric or hybrid vehicle leasing? Contact us today.
For more details regarding changed to VED, see the official government policy paper here.
