The DVLA has issued a 20-day warning to drivers across the UK about significant changes to vehicle excise duty (VED), set to take effect from April 1, 2025. These new rules will, for the first time, require electric and low-emission vehicles to pay road tax, removing the exemption they previously enjoyed.
As reported by DevonLive, the reform aims to bring all vehicles under the same taxation system, impacting both new and existing owners. With this change rapidly approaching, millions of drivers will need to prepare for the financial implications.
DVLA Issues Final Warning Ahead of Major Vehicle Tax Overhaul
The DVLA has issued a 20-day warning to drivers regarding upcoming changes to vehicle excise duty (VED), set to take effect from April 1, 2025. The new rules will mark the first time that electric and low-emission vehicles are subject to road tax, aligning their taxation with petrol and diesel vehicles.
Posting on X (formerly Twitter), the DVLA reminded drivers :
Changes to Vehicle Tax for Electric and Low-Emission Vehicles
Under the new system, owners of electric, zero-emission, and low-emission vehicles will no longer be exempt from VED. The reform eliminates Band A, which previously allowed certain vehicles to pay no tax. Instead, these vehicles will be taxed based on their registration date:
- Vehicles registered on or after April 1, 2025 will pay an initial first-year tax rate of £10, followed by the standard annual rate of £195.
- Vehicles registered between April 1, 2017, and March 31, 2025, will directly pay the standard rate of £195.
- Vehicles registered between March 1, 2001, and March 31, 2017, will move to the first band with a VED charge of £20.
As part of the announcement, the DVLA clarified:
This new measure removes Band A under the existing VED system, which is currently £0. Vehicles in this band will be required to move to the first band where a rate becomes payable.
End of Hybrid Vehicle Tax Discount
A further adjustment includes the removal of the £10 annual discount for hybrid and alternative fuel vehicles (AFVs). The tax rate for these vehicles will now depend on their CO2 emissions and the date of registration:
- Registered before April 1, 2017: The tax rate will continue to depend on CO2 emissions.
- Registered on or after April 1, 2017: The vehicle will pay the standard rate of £195.
Impact on Electric Vans and Motorcycles
Changes will also apply to other vehicle categories :
- Most electric vans will be subject to the standard annual rate for light goods vehicles.
- Electric motorcycles and tricycles will be taxed under the smallest engine category.
Additionally, electric and zero-emission vehicles exceeding £40,000 will be subject to an expensive car supplement, requiring them to pay an additional tax for the first five years following their second licence renewal.
The policy change was confirmed by Chancellor Rachel Reeves in the Autumn Budget, but it was initially proposed by Jeremy Hunt two years earlier while he was Chancellor under the Conservative government. This shift reflects a broader move towards harmonising vehicle taxation, removing incentives that previously favoured electric and hybrid vehicles.
