Registering for road tax is a prerequisite if you want to drive in the UK. But many drivers are set to see some big changes to road tax in 2025. There’s also organisations putting pressure on Government to completely overhaul the system and replace it with something different. We explain what to look out for.
What is road tax?
Road tax in the UK is formally known as vehicle excise duty (VED). VED is payable by the vehicle’s keeper – the person whose name is on the pink V5C logbook. Even if no charge is due the vehicle still has to be road tax registered. Believe it or not, road tax has been in operation since 1888 and was first introduced for vehicles in 1920 in the UK!
How much does it cost my vehicle to tax?
You can check if a vehicle is taxed, and how much it costs to tax, by running a free Total Car Check. We also provide lots of other information about the vehicle including its full specification, MOT history and fuel economy. Plus we give you annual MOT and road tax reminders if you register some basic details with us.
Changes to road tax in 2025
Currently you don’t have to pay any road tax to run a zero emission car, but from 1 April 2025 this is set to change.
Road tax payable by keepers of zero emission cars from 1 April 2025
- New electric cars – All new battery electric cars registered for the first time will pay:
- In year 1: The lowest chargeable VED band, currently set at up to £30.
- Year 2 and onwards: the standard rate of VED currently set at £190 for most cars.
- Battery electric cars already registered– will attract the standard rate of VED each year currently set at £190 a year.
- New battery electric cars purchased for a list price of £40,000+ will start paying the ‘expensive car supplement’. This is currently set at £410 and is payable for the first 5 years the car is registered, by whoever the keeper of the car is over those 5 years. So that’s at least £600 a year (standard + expensive car supplement) in the first 5 years.
Why is the road tax system changing?
The Government receives £8 billion from road tax and £25 billion from tax on petrol and diesel (fuel duty). But as we move closer to 2030 a growing proportion of new cars and vans will be zero emission and powered by electricity.
If the Government doesn’t change the system there will be a significant shortfall of funds to pay for public services. Therefore the changes from April 2025 are likely to be the first step in many that could see a completely different approach to vehicle taxation.
Is road pricing the future?
Road pricing is where drivers pay based on how much they drive or use the UK’s roads. This could be implemented using a range of measures including: new tolls set up across the UK; and GPS or cameras tracking vehicles themselves.
Recently the Campaign for Better Transport (CBT), a charity supported by 37 motoring organisations – wrote a letter to the Chancellor, Rachel Reeves to consider road pricing as a way of fairly charging electric vehicle users. This has been put to the Chancellor ahead of the Autumn Statement set for 30th October.
How much could road pricing cost?
The Resolution Foundation, a Think Tank has suggested charging 6p + VAT per mile. Based on an average motorist travelling 7,000 miles annually this could amount to over £500 per year. Most drivers are currently charged £190 a year. However, CBT has suggested various options for implementing the scheme.
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