The below factsheet has been put together by the BVRLA to provide guidance on the changes to Vehicle Excise Duty on 1st April 2025.

Background

In the 2024 Autumn Budget, the Chancellor of the Exchequer outlined several tax changes that would impact the automotive sector. This announcement included changes to the Vehicle Excise Duty (VED) which will be effective from April 2025. This factsheet aims to support members in understanding the changes and how they may manage the impact operationally.

What’s New?

From April 2025, the following changes are in place:

• New zero emission cars registered on or after the 1st April 2025 will be liable to pay the lowest first year rate of VED, which is currently £10 a year*.
• From the second year of registration onwards, zero emission cars will then move to the standard rate of VED, currently £195 a year*.
• Zero emission cars first registered between 1 April 2017 and 31 March 2025 will also pay the standard rate of VED.
• New zero emission cars registered on or after 1 April 2025 will be liable for the Expensive Car Supplement.
• EVs registered before 1 April 2025 will continue to be exempt from the Expensive Car Supplement.
• Zero emission vans will move to the rate for petrol and diesel light goods vehicles, currently £345 a year for most vans*.
• Rates for alternative fuel vehicles and hybrids will also be equalised.

The DVLA have noted the following:

• Licences taken out up to 31 March 2025 will be charged at the current rates.
• Vehicle Keepers may re-licence up to a month before the date of liability using DVLA’s Electronic Vehicle Licensing online service. In certain circumstances, such as where the Vehicle Keeper will be away, there is also the option to re-licence up to two months before, but this can only be done via the paper application route. Vehicle keepers may also choose to take out additional licences which will be charged at the rate according to the date of the new licence.

The purpose of this fact sheet is to provide general guidance and information only. Although every effort is made to ensure that the
content is accurate, the BVRLA cannot accept any liability whatsoever for any inaccuracy contained within it, nor for any damage or loss,
direct or indirect, which may be suffered because of any reliance placed upon the information provided, whether arising in contract, tort or in any other way. Advice should always be obtained from your own professional advisers before committing to a specific action.