UK Road Tax 2025 - Know Who's Exempt from Paying Vehicle Tax – Save Up to £2,000 a Year

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Big changes are coming to the UK’s vehicle tax system in 2025 and they’re set to affect far more drivers than before. Whether you’re already behind the wheel of an electric car, planning to buy one, or just trying to figure out if your vehicle is still tax-exempt, staying informed has never been more important.

In this guide, we break down what’s changing from April 2025, who’s affected, and how you can still save money or avoid an unexpected fine.

What’s Changing in 2025?

From 1 April 2025, Vehicle Excise Duty (VED) commonly known as road tax is undergoing a major overhaul.

EV Tax Exemption Ends

Until now, electric vehicles (EVs) have enjoyed full exemption from road tax. But starting next April, that’s changing.

New EVs registered on or after 1 April 2025 will no longer be exempt.
They’ll pay a first-year VED, which is currently lower than for petrol or diesel cars.
From the second year onward, owners will need to pay the standard annual rate of road tax.

Return of the “Expensive Car” Tax

Another significant change is the return of the Expensive Car Supplement a tax for vehicles with a list price over £40,000.

Even if the car is electric, if it originally cost over £40,000, you’ll pay an extra £390 per year for five years, starting in year two.
This applies whether the car is brand new or a second-hand purchase what matters is the original list price, not what you paid.

Who Still Qualifies for Road Tax Exemption?

Thankfully, some drivers and vehicles will still be exempt under the updated rules. Here’s a quick look:

Historic Vehicles

If your car is over 40 years old, it likely qualifies as historic and is exempt from road tax.
You’ll need to apply via your V5C logbook to confirm the vehicle’s age.

Vehicles for Disabled People

If you’re receiving benefits such as the Higher Rate Mobility Component of DLA or Enhanced Rate Mobility of PIP, and the vehicle is registered in your name, you may be exempt.
Supporting documentation is required when applying.

Agricultural & Forestry Vehicles

Tractors, off-road agricultural vehicles, and others used for horticulture or forestry may still be exempt if used only on private land or for short public journeys between sites.

SORN-Declared Vehicles

If your car is not being used or parked on public roads, and you’ve officially declared it SORN (Statutory Off Road Notification), you won’t pay any tax.

What Does This Mean for EV Owners?

These changes signal the UK government’s shift away from offering generous incentives for EV adoption.

While electric vehicles still offer cheaper running costs, zero emissions, and lower maintenance bills, their tax-free status is ending and high-value EVs now come with a big extra cost.

If you’re planning to buy a Tesla, Porsche Taycan, BMW i7, or any other high-end electric model, check if the list price pushes it over the £40,000 threshold because that could mean nearly £2,000 in extra tax over 5 years.

What You Should Check Right Now

Before April 2025 arrives, here’s what every UK driver should do:

1. Check Your Registration Date

If your car was registered before April 2017, you’re on the old tax system, which is based on emissions.
Cars registered after that date are taxed differently, and EVs registered from April 2025 onward will face new charges.

2. Find Your Vehicle’s Original List Price

This applies even if you bought the car second-hand.
Use official valuation tools or manufacturer websites to check the car’s original RRP, not the price you paid.

3. Review Any Disability Benefits

If you think you may qualify for a disability exemption, make sure you’re receiving the correct benefits and that the vehicle is registered to you.

Common Mistakes to Avoid

It’s easy to get caught out if you’re not careful. Here are some frequent slip-ups to watch for:

Assuming tax exemptions are automatic – Most exemptions require an application or renewal.
Forgetting about the £40,000 supplement – Especially when buying a used vehicle. The DVLA still looks at the original new price.
Failing to SORN your vehicle properly – Just parking it off-road isn’t enough. You must officially declare the vehicle as off-road.

Trends to Watch

The UK government is moving toward a more uniform vehicle tax structure, with less emphasis on emissions and more on vehicle value and usage. This suggests future updates could:

Further increase VED for petrol and diesel cars.
Introduce pay-per-mile or congestion-style charges for all cars, including EVs.
Make ownership more expensive overall, especially for luxury and high-powered vehicles.

Final Thoughts

Whether you’re driving a classic car, managing a mobility vehicle, or eyeing your next electric upgrade, knowing how VED is changing in 2025 can save you hundreds of pounds and a potential fine.

The key takeaway? Don’t assume you’re exempt. Take a few minutes to check your registration date, list price, and eligibility. If you’re exempt great. But if not, being prepared for the new charges is the smart way forward.