Understanding Vehicle Excise Duty (VED) or "Road Tax" for EVs

Vehicle Excise Duty (VED), commonly known as road tax, is a charge applied to vehicles used on UK roads. While electric vehicles (EVs) were previously exempt, this changed from April 2025, meaning EV drivers are now required to pay VED like petrol and diesel vehicle owners

This guide explains how VED works for electric cars and vans, what you’ll pay, and how future proposals like mileage-based charging (eVED) could affect EV drivers in the years ahead.

What is Vehicle Excise Duty (VED)?

VED is a tax you pay to drive a vehicle on UK roads.

The amount you'll pay depends on:

Your vehicle's CO₂ emissions (for electric cars and vans this is zero or 0g/km)
Its registration date
The vehicle’s list price when new

How much road tax do EV owners pay?

How much road tax you'll pay as an EV driver will depend on when your car was first registered and it's list price (also sometimes called a P11D) was when it was new:

EVs registered on or after April 1, 2017 and 31 March 2025, will pay the standard annual rate of VED, which is currently (April 2026) £200 per year.
Older electric vehicles registered between 1st March 2001 and 30th March 2017 will be subject to the reduced rate for older vehicles of £20 per year.
Newer EVs registered after 1st April 2026 will pay:
- Year 1: £10
- Year 2 onwards: £200 (Standard annual rate)
If the vehicle had a list price above £50,000 when new, an additional “expensive car supplement” applies from years 2–6. Currently an extra £440 annually between years 2-6. Returning to the standard rate afterwards.

Are electric vehicles (EVs) exempt from road tax in the UK?

No. Since April 2025, electric cars and vans are no longer exempt from VED.

Although EV owners now contribute through road tax, electric vehicles still typically offer significantly lower running costs compared to petrol and diesel alternatives thanks to lower charging and maintenance costs.

What about the pay-per-mile EV tax (eVED)?

Alongside VED changes, a future mileage-based charging system for electric cars, sometimes referred to as “eVED” has been announced.

This pay-per-mile model will charge drivers:

3p per mile for electric cars
1.5p per mile for plug-in hybrids
Electric vans won't be charged eVED (yet!)

The aim would be to replace declining fuel duty revenues as more drivers switch to electric vehicles. You can read our full guide here: The 3p-per-mile eVED explained

Does my Personal Contract Hire (PCH) or Business Contract Hire (BCH) lease include road tax?

Yes. When you lease a vehicle through PCH or BCH, the VED cost applicable at the start of the agreement is included within your monthly payments.

However, if VED rates increase during your lease term, your funder may issue an additional invoice to recover the difference.

For many EV drivers, this was particularly noticeable following the introduction of EV VED charges in 2025, as electric vehicles previously paid £0 road tax.

Find your next electric car lease now

When will I receive a VED invoice?

Although EV VED changes came into effect in April 2025, lease providers typically recharge VED around the vehicle’s registration anniversary.

This means some drivers may not have received any additional VED charge until several months later, depending on when the vehicle was first registered.

Vehicle registration date	Annual VED (from April 2025)
Between 1 April 2017 - 31 March 2025	£200 (standard rate)
Before 1st April 2017	£20 (reduced rate)
On or after 1 April 2025 (Year 1)	£10
On or after 1 April 2025 (Year 2+)	£200 or £640*

Do expensive electric cars over £50,000 pay more road tax?

New electric cars (registered on or after 1st April 2026) with a list price of £50,000 or more are subject to the expensive car supplement. This means an additional charge (£440 per year) will apply from the second to the sixth year of registration, bringing the total to £640 per year for that period.

Annual VED costs – New electric cars from April 2026
List price	Year 1	Years 2-6	Year 7 onwards
Less than £50,000	£10	£200**	£200
£50,000 and over	£10	£200	£640

volkswagen id buzz cargo electric van in navy, parked at warehouse

Are electric vans subject to road tax?

Yes. Electric vans are also now subject to VED. Despite this, electric vans continue to offer major advantages for businesses and fleets, including:

Lower fuel costs - The savings on charging compared to traditional fuel are substantial,
and the reduced servicing needs of electric vans including the Vauxhall Vivaro Electric or the stylish Volkswagen ID. Buzz Cargo offer greater operational reliability.
Currently no eVED to pay for electric vans
Lower emissions - future-proofing your fleet against tightening emissions regulations and avoiding the escalating running costs associated with non-compliant diesel vehicles

For many operators, switching to electric vans still delivers meaningful whole-life cost savings compared to diesel alternatives.

Browse All Electric Van Lease Offers

Do plug-in hybrid vehicles have to pay full road tax?

Yes, plug-in hybrid vehicles (PHEVs) also saw an increase in VED from April 2025, they no longer benefit from reduced rates and pay the same standard rates as petrol and diesel cars.

Have EVs always had to pay road tax?

No, until April 2025 electric cars and vans were VED exempt

So why was road tax introduced for electric cars and vans? The UK government removed the electric powertrain exemption for road tax to ensure fairness across all vehicle types and to compensate for the reduction in fuel duty revenue as more and more drivers transition to EVs.

April 2025 VED changes: read more