Car tax in the UK—officially known as Vehicle Excise Duty (VED)—can seem confusing, especially with changing rules, new emissions standards, and electric vehicle policies. As of 2025, several updates have reshaped how car tax is calculated and who pays what.
This guide breaks down how VED works, what it costs, and who’s exempt under the latest UK government regulations.
What Is Vehicle Excise Duty (VED)?
Vehicle Excise Duty is a tax you pay to drive a vehicle on UK public roads. It’s commonly referred to as “road tax” or “car tax.” The amount you pay depends on factors such as:
- The car’s CO₂ emissions
- Its list price (including options)
- The year it was first registered
- Whether it’s petrol, diesel, hybrid, or electric
How VED Works in 2025
VED is split into two parts:
- First-Year Rate (paid when a car is first registered)
- Standard Rate (paid annually after the first year)
Let’s break down each.
1. First-Year VED Rates (2025)
The first year of tax is based entirely on a car’s CO₂ emissions (g/km). Here’s a simplified version of the 2025 rates:
| CO₂ Emissions (g/km) | First-Year VED (2025) |
|---|---|
| 0 (EVs) | £0 |
| 1–50 | £10 |
| 51–75 | £30 |
| 76–90 | £135 |
| 91–100 | £165 |
| 101–110 | £185 |
| 111–130 | £210 |
| 131–150 | £255 |
| 151–170 | £645 |
| 171–190 | £1,040 |
| 191–225 | £1,565 |
| 226–255 | £2,220 |
| Over 255 | £2,745 |
👉 Note: These figures apply to new cars registered from April 2025.
2. Standard Annual VED (After Year 1)
From the second year onwards, most cars fall into the flat standard rate category:
- Petrol and Diesel Cars: £190
- Hybrids (MHEV, PHEV): £180
- Electric Cars: Now taxed at £190 (new from 2025)
🚨 New for EVs: Starting April 2025, electric cars are no longer exempt from VED. This includes older EVs that were previously tax-free.
Premium Car Tax (Expensive Car Supplement)
If your car had a list price of over £40,000 when new, there’s an extra charge:
- An additional £410/year on top of your standard rate
- Applies from year 2 to year 6 (not during first year)
Yes, this now includes electric cars, too—even if you paid £0 in the first year.
Who’s Exempt from VED in 2025?
Some vehicles and people still qualify for VED exemption or discounts:
- Disabled drivers (eligible for the DVLA’s disabled tax class)
- Historic vehicles (over 40 years old)
- Mopeds and agricultural vehicles
Unfortunately, electric cars no longer qualify for blanket exemption from April 2025.
How to Pay Car Tax
Pay online at:
🔗 https://www.gov.uk/vehicle-tax
You’ll need:
- Your vehicle registration number
- A recent V5C logbook or tax reminder letter
- A debit/credit card or bank details
You can pay:
- Monthly
- Every 6 months
- Annually (cheapest option)
Final Thoughts
VED is no longer as straightforward as it once was, especially with new 2025 changes affecting electric cars and premium vehicles. Whether you drive a brand-new EV or a reliable diesel, it’s essential to know where you stand.
Before buying a car—especially used—check its tax class and history using the DVLA’s free tools. And if you’re switching to electric in 2025, be aware that the tax-free ride is officially over.
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