April 2025 Car Tax: What You Need to Know

12/03/2025
All-New All-Electric Ford Capri Premium

The UK government will be implementing significant changes to Vehicle Excise Duty (VED) starting 1st April 2025. These changes will affect new cars, and for the first time, will apply to new electric vehicles (EVs) as well as internal combustion engine (ICE) vehicles.

 

First Year VED Rates

  • EVs: New EVs will be subject to a first-year VED of £10, instead of the old rate of £0. However, from the second year onwards, they will incur the standard annual rate of £195.

  • ICE vehicles and Hybrid vehicles: Cars in this category will face substantial increases, as outlined below.

 

 

 CO₂ Emissions New VED Rate Previous VED Rate
0g/km CO₂ £10 £0
1–50g/km CO₂ £110 £10
51–75g/km CO₂ £130 £30
76–90g/km CO₂ £270 £135
91–100g/km CO₂ £350 £175
101–110g/km CO₂ £390 £195
111–130g/km CO₂ £440 £220
131–150g/km CO₂ £540 £270
151–170g/km CO₂ £1,360 £680
171–190g/km CO₂ £2,190 £1,095
191–225g/km CO₂ £3,300 £1,650
226–255g/km CO₂ £4,680 £2,340
Over 255g/km CO₂ £5,490 £2,745

Standard Annual VED Rates

  • All vehicles registered after 1st April 2017: The standard yearly VED rate will go up to £195, which is a slight increase from last year’s £190.

  • Expensive Car Supplement: Any vehicle with a list price over £40,000 will be subject to an additional £425 per year from the second to sixth year of registration.

 

 

What is the Expensive Car Supplement?

The Expensive Car Supplement, sometimes referred to as the luxury car tax, is an additional tax put on vehicles with a list price exceeding £40,000.

This supplement will affect all vehicles. EVs used to be exempt from this type of charge, but from April 1st 2025 they will incur this tax increase.

Owners of premium cars will pay an extra £425 per year for five years, beginning the second year of registration - on top of the standard annual VED rate of £195.

It’s important to note the term list price, which means even if you purchase the car for less through dealer discounts, if the original manufacturer’s list price exceeds £40,000, you will still be subject to the Expensive Car Supplement.

 

 

Electric Vehicle Impact

One of the major changes this 2025 VED increase brings is the effect it will have on EVs. Owners of expensive EVs will now pay £620 per year, after the second year of registration until the fifth year, when totalling the costs of the standard VED rate of £195 plus the £425 Expensive Car Supplement.

 

Other Tax Changes

The government also announced significant changes to the taxation of double cab pickup vehicles, such as the Ford Ranger. Whilst these versatile vehicles were once classified as good vehicles, they will be treated as company cars for tax purposes as of April 6th 2025.

Good news is, for those who purchase, lease, or order a double cab pickup before April will be subject to the previous tax treatment. This will apply to the earlier of disposal, lease expiry, or April 2029.

 

 

Get Your Ford Ranger Before the New Tax Increases

 

 

 

 

There's never been a better time to purchase a new car from TCH Ford. Get behind the wheel of a brand new car before April 1st to avoid paying the higher tax rate for the upcoming year. 

 

 

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