New Car Tax Rates to Take Effect in April 2025
Motorists should prepare for changes to Vehicle Excise Duty (VED) rates starting April 1, 2025. These updates, prompted by inflation as measured by the Retail Price Index (RPI), will affect certain vehicle owners across the UK.
Van owners, in particular, will see an increase in their annual VED fees. Those currently paying £335 per year will face an increase of £10, bringing their total to £345. While this rise is less substantial than the £15 increase imposed last year, it still represents a notable cost for vehicle owners.
Ayvens, a motoring expert, highlighted the broader impact of these changes and noted that the government is making “significant changes to vehicle tax.”
The adjustments will also affect electric vehicle (EV) owners. Previously exempt from VED, electric van owners will now be subject to the same standard rates as other light goods vehicles.
EV specialists at Drive Electric clarified that “electric vans will also be subject to road tax from April 2025.” This could mean additional costs for businesses and individuals who use electric vans. Still, experts note that electric vans typically have lower running costs compared to gasoline or diesel-powered alternatives.
The number of vans on UK roads has grown significantly in recent years, with Zego data suggesting an estimated 4.6 million licensed vans today. This represents a substantial increase from the 2.3 million vans recorded in 1998.
In the first year of registration, cars will pay the lowest first-year rate, currently £10. Vans will pay the standard rate, currently £345.
After the first year, the annual standard rate is charged on the anniversary of the vehicle’s registration. This rate is currently £195 for cars and £345 for vans for the 2025/26 tax year, and it is scheduled to increase annually in line with inflation.
