Your Guide to Car Tax Changes 2025

On the 1st of April 2025, new car tax rules came into force. All motorists are required to pay car tax to legally drive or store their car on the roads. That’s why it’s essential to brush up on the latest rule changes to stay on the right side of the law. 

Car tax is formally known as Vehicle Excise Duty or VED. It’s something you’ll be familiar with, but it’s now time to get familiar with the new rules too. In this article, the team at The Windscreen Company will outline everything you need to know.

What changes have come into place? 

In this section, you can read an overview of the key car tax changes that have been introduced in the UK this year. 

• Electric cars are no longer exempt: For the first time ever, electric vehicles will now be obliged to pay car tax. The amount of tax a motorist pays will depend on when the vehicle was purchased. Here is a further breakdown of the rules: 

1. 1. 1. Electric cars registered on the 1st of April 2025, or after this date, will need to pay £10 first-year road tax until 2029 to 2030. 
      2. If an electric vehicle was registered between the dates of the 1st of April 2017 and the 31st of March 2025, the owner will pay the standard road tax of £195. 
      3. If an electric car was registered between the dates 1st March 2001 and 31st March 2017, the vehicle owner will pay £20 road tax a year
      4. New EVs over £40,000 may also need to pay an additional fee known as the luxury car tax, which is £425 extra on top of the standard road tax. You will only need to pay this if the vehicle was registered after the 1st of April 2025. 
      5. Fees will be slightly different for EV vans, coming in at around £355 per year. 

• An increase in first-year car tax: The tax you pay in the first year of using a car is calculated on the emissions it produces. Fuel-powered cars will expect an increase in this figure, and the exact amount of first-year tax will be calculated based on how much carbon dioxide your vehicle produces every kilometre it travels. 

• An increase in standard road tax: This figure refers to the car tax you’ll pay from the second year onwards. The standard road tax has increased to £195, and this applies to any vehicle registered after April 1st 2017. Cars will be taxed against one of three bands, which are zero, standard or premium. The luxury car tax for vehicles over £40,000 bought new has now increased to £425. 

• Tax for vehicles registered before 31st March 2017: Any car registered between 1st March 2001 and 31st March 2017 will be categorised according to its emissions rather than the three bands outlined in the previous section. The increases for each emissions band have altered differently under the 2025 changes, and a few have remained as they were. 

• Tax for vehicles registered before 1st March 2001: If your vehicle was registered before March 2001, it will be categorised by its engine size instead, either over or under 1549cc. Each of these two bands will come with its own tax rates. 

In summary, electric car owners and those with vehicles producing high emissions will be most impacted by these new changes. 

To discover precisely how much road tax you owe, use the government’s vehicle tax rate tables for clarity. Refer to your vehicle logbook to discover when your vehicle was registered, and this will help you find out the band. 

Why have these changes happened? 

Inflation is the main reason behind car tax changes, with tax increasing at the start of the new financial year in April. The decision to tax electric vehicles may be due to their rise in popularity, which has resulted in less overall car tax paid by UK road users. 

Is it now worth having an electric car? 

The introduction of road tax for electric vehicles has certainly reduced the benefit and motivation for purchasing these vehicles. 

However, considering that the sale of new diesel and petrol cars will be banned by 2030 in the UK, it will be the new normal to own and drive an electric vehicle. Ultimately, this means that it is certainly worth purchasing an electric car in preparation for the new rules, and also comes with the ethical advantages of supporting the health of our planet. 

Are you looking for 24-hour mobile windscreen repair and replacement? The Windscreen Company is here to help, with a fleet of vehicles ready to deploy across Essex and the West Midlands. Whether you’re stranded at the roadside or stuck at home, we’ll get you moving once again. 

The Windscreen Company

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The Windscreen Company, has over 20 years of experience in windscreen repair and replacement. Since 1998, they have been at the forefront of industry innovation, leveraging the latest technology to ensure customer safety and satisfaction.

The Windscreen Company's, help-and-advice pages offer valuable tips and guidance on maintaining vehicle safety through quality windscreen care, while also featuring updated industry realted content.

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