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Market updates

Vehicle Excise Duty (VED) - Rates From April 1st 2025

Market updates • 21/03/2025 • 3 min read

From April 1st, Vehicle Excise Duty (VED) rates (sometimes known as the road fund licence) will change, affecting all drivers in the UK.

Battery Electric Vehicles (BEVs) and first-year VED rates will see prominent changes, but hybrid, petrol and diesel car owners will also be affected.  We hope this summary of the changes is helpful.

 

New Cars - First Year VED Rates Increase 

A brand new car’s VED is based on emissions. BEVs registered after April 1st 2025 will now pay first-year VED for the first time, while petrol, hybrid and RDE2-compliant diesels will also see changes depending on their emissions.

  • BEVs - Cars registered on or after April 1st 2025, will pay the first year VED for the first time at £10 until 2029-30 
  • All cars emitting between 1-50 g/km of CO2, which will include most plug-in hybrids (PHEVs), will see their first year VED bill rise to £110. Currently, hybrids in this band pay zero VED in the first year, while petrol and diesel cars pay £10. 
  • New cars emitting between 51-75g/km of CO2 will increase their VED rates from £30 (or £20 for hybrids) to £135. 

 

All other VED rates will double next year:

 

  • 0g/km – £10 (previously £0)  
  • 1-50g/km – £110 (previously £10)  
  • 51-75g/km – £130 (previously £30)  
  • 76-90g/km – £270 (previously £135)  
  • 91-100g/km – £350 (previously £175)  
  • 101-110g/km – £390 (previously £195)  
  • 111-130g/km – £440 (previously £220)  
  • 131-150g/km – £540 (previously £270)  
  • 151-170g/km – £1360 (previously £680)  
  • 171-190g/km – £2190 (previously £1095)  
  • 191-225g/km – £3300 (previously £1650)  
  • 226-255g/km – £4680 (previously £2340)  
  • 255+g/km – £5490 (previously £2475) 

Expensive Car Supplement

The expensive car supplement, currently paid on all petrol and diesel cars costing over £40K when new, rises from £410 to £425 and will be extended to all cars, including EVs registered on or after April 1st 2025. It is paid in addition to standard VED each year from the second to the sixth year a car is registered on the road.

 

Battery Electric Vehicles (BEVs) – note, cars and vans are different 

  • BEVs - Cars registered between April 1st 2017, and 31 March 2025 will pay the standard VED of £195 from April 1st 2025 
  • BEVs - Cars registered between March 1st 2001 and March 30th 2017 will now pay £20 VED a year 
  • Electric vans will now be charged £355 VED each year – the same rate as petrol and diesel light goods vehicles

 

Standard VED Rates - all cars registered after April 1st 2017

The standard VED rate of £195 applies to all cars registered after April 1st 2017, from their second year onwards. Previously, it was £190 for petrol/diesel cars, with a £10 discount for hybrids and free for electric cars.

VED rates for cars registered between March 1st 2001, and March 31st  2017 - VED is based on fuel type and CO2 emissions.

Cars registered between March 1st 2001, and March 31st 2017, are sorted into thirteen emission-based bands for VED. 

The most prominent change from April 1st is that cars with CO2 emissions of 0-100g/km will now pay £20 per year (previously, it was free). The rest of the bands have increased by between £5 and £25 or stayed the same, with the highest band for cars emitting over 255g/km now rising to £760.

Cars and light goods vehicles registered before March 1st  2001 – VED is based on engine size

  • Not over 1549cc - £210
  • Over 1549cc - £345

 

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