A new UK tax year brings changes to car tax, also known as Vehicle Excise Duty (VED). It’s a legal requirement in the UK to pay VED if you want to drive or store your car on the road. However, VED tax rates and banding are reviewed annually, and changes from April 2025 will impact both new and used car costs. These changes can make it confusing to know what you owe. This guide will break down the car tax bands for 2025 in clear, simple terms for all drivers.
What are car tax bands?
Your car or road tax (VED) is paid annually. For most vehicles, your car tax band is based on CO2 emissions.
As a general rule, the lower your vehicular emissions, the lower the cost of your car tax.
It’s important to know that there are different rules for petrol and diesel vehicles, as well as hybrids, EVs and older cars.
Knowing your car tax band for 2025 can help new buyers choose more cost-effective cars, and will ensure existing motorists know what they owe in tax.
You can find out the tax band for your car by checking the year of its registration. Refer to your vehicle’s V5C logbook to determine the date of first registration – you should find this on the first page of the logbook.
Once you’ve established the year of the vehicle’s first registration, you’ll be able to work out its tax band.
What’s changing with car tax in 2025?
On 1 April 2025, changes to car tax bands were introduced by the UK government.
Electric vehicles
The most significant changes apply to electric vehicles (EVs), which are no longer exempt from paying VED.
Depending on the registration year of your EV, you’ll face the following tax band:
- EVs registered from 1 April 2025 onwards will pay the standard VED rate of £10 for the first year and £195 each year after that
- EVs registered between 1 April 2017 and 31 March 2025 will pay £195 per year, which is the standard rate of VED for all motorists
- EVs registered between 1 March 2001 and 31 March 2017 will pay £20 each year
- Electric vans will now be charged £355 annual VED – the same rate as petrol and diesel vans
If your EV is registered after 1 April 2025, you’ll also need to pay the Expensive Car Supplement – also known as the luxury car tax – if your car costs more than £40,000 when new. This tax is £425 annually.
Other changes to UK car tax bands for 2025 include scrapping the £10 annual discount for hybrid and alternatively fuelled vehicles (AFVs).
First year of car tax (non-EVs)
Changes have also been implemented around the first year of car tax for brand-new petrol, hybrid and RDE2-compliant diesel vehicles. This is paid based on emissions, so it differs from the standard car tax rate.
For these vehicles, some of the changes to tax bands include:
- All new cars emitting between 1-50g/km of CO2 – which includes most plug-in hybrids – will see their VED rise to £110. Previously, hybrids in this category have paid zero VED, and petrol and diesel cars have paid £10 VED.
- All new cars emitting between 51-75g/km of CO1 will see their VED rise to £130. Previously, hybrids in this category have paid £20 VED, and petrol and diesel cars have paid £30.
You can use the government’s vehicle tax rates table to help you work out how much VED you owe.
Standard road tax rates
The standard road tax rate is what you pay annually to tax your vehicle from the second year of registration onwards, for all vehicles registered after 1 April 2017.
From 1 April 2025, the standard tax rate for all cars registered after 1 April 2017 is £195. Previously, this was £190 for petrol and diesel cars, with a £10 discount for hybrids, and EVs were exempt.
Road tax for cars registered between 1 March 2001 and 31 March 2017
Cars registered in this bracket of time are sorted into emissions-based bands for road tax every year – not the year the vehicle was first registered.
These bands have increased by between £5 to £25, or have remained the same.
The most significant change is for cars with a CO2 emission of 0-100g/km, which will now pay £20 per year where it was previously free.
Car tax bands for 2025: a quick guide
Below, we provide a table summarising the UK’s car tax bands (effective from 1 April 2025). This outlines the first-year VED rates and standard annual VED rates, based on CO2 emissions for non-EVs.
CO₂ Emissions (g/km) | First-Year Rate | Standard Annual Rate (from Year 2) |
0 | £10 | £195 |
1–50 | £110 | £195 |
51–75 | £130 | £195 |
76–90 | £270 | £195 |
91–100 | £350 | £195 |
101–110 | £390 | £195 |
111–130 | £440 | £195 |
131–150 | £540 | £195 |
151–170 | £1,360 | £195 |
171–190 | £2,190 | £195 |
191–225 | £3,300 | £195 |
226–255 | £4,680 | £195 |
Over 255 | £5,490 | £195 |
EVs will face the following VED:
- First-Year Rate: £10
- Standard Annual Rate (from Year 2): £195
- Expensive Car Supplement: £425 annually for five years if the EV’s list price exceeds £40,000
Hybrid and alternative fuel vehicles will face the following:
- First-Year Rate: Same as petrol/diesel vehicles based on CO₂ emissions
- Standard Annual Rate (from Year 2): £195
- Expensive Car Supplement: £425 annually for five years if the vehicle’s list price exceeds £40,000
Car tax examples (petrol, diesel, EV)
Below, we provide three key examples of how the new car tax bands for 2025 will impact three popular types of vehicle:
Petrol Hatchback – Low Emissions
We’ve taken the Ford Fiesta 1.0 EcoBoost as our example of a small petrol car that emits around 110g/km of CO2.
Under the 2025 rules, this car will face a first-year tax cost of £390 based on its emissions. After that, the standard annual rate drops to £195 per year. Since the Fiesta’s list price is well under £40,000, there’s no extra ‘luxury car’ charge to worry about.
For small car drivers, these 2025 VED changes are relatively modest – but there are slightly higher first-year costs compared to previous rates.
Mid-Range SUV – High Emissions
This example applies to a diesel SUV like the Land Rover Discovery Sport, which emits around 190g/km of CO2.
These emissions place the Discovery in one of the highest tax bands for the first year — expect to pay £2,190 right off the bat, or more if the model doesn’t meet the latest RDE2 emissions standards.
From year two onwards, however, the standard rate levels out at £195 per year.
That said, because this model typically costs over £40,000, it will be subject to the Expensive Car Supplement — an additional £425 annually for five years (years 2–6).
This change to 2025 car tax bands means even more costs for SUV drivers, particularly those opting for high-spec or luxury trims.
Electric Vehicle – Registered After April 2025
We’ll use a Tesla Model Y registered after April 2025 in this example.
Unlike in previous years, you won’t benefit from zero road tax on this model. Instead, you’ll pay a first-year rate of £10, followed by £195 per year from year two.
The Tesla also exceeds the £40,000 threshold, so you’ll pay the £425 Expensive Car Supplement for five years.
These changes to 2025’s EV tax bands mark a major change from previous years, where EVs were completely exempt from VED and luxury surcharges.
How car tax affects your car buying journey
If you’re looking to finance a car, remember that VED is an extra cost you’ll need to plan for. If you own a vehicle, you’ll automatically receive a reminder from the DVLA before the tax is due. You can pay your VED online.
Choosing a lower-tax band vehicle could save you hundreds annually.
The changes to UK car tax bands for EVs might change your mind about financing one. If you’re still keen to own an EV, stay abreast of any future taxation changes in the coming years to ensure you remain legally compliant.
Final thoughts on new car tax bands 2025
Now you know the latest changes from April, for car tax bands for 2025, you can figure out what you owe which will help you budget better.
Whether you’re buying new or used, factoring car tax into your purchasing equation will help you avoid any surprise fees.
If you don’t own an electric vehicle, check your car’s CO2 emissions and its date of first registration. This should be detailed in your car’s logbook (V5C), and will help you calculate your car tax band.
At My Car Credit, we’ve got plenty of up-to-date advice on finding a car that’s suitable for your needs and circumstances, as well as a one-stop shop of quality, pre-approved nearly-new and used vehicles.
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