Overview

• The DVLA will send urgent letters to millions of drivers to inform them of changes to Vehicle Excise Duty (VED) following its overhaul on April 1, 2025.
• Standard annual VED rates are now £195 for cars and £345 for vans, with inflation-based increases expected yearly.
• Electric vehicles are no longer exempt from road tax, with new EVs subject to a £10 first-year showroom tax and a £425 annual Expensive Car Supplement for years two through six if priced over £40,000.
• First-year VED rates for high-emission cars have doubled, while low-emission vehicles face increases of up to £100 compared to previous rates.
• Industry experts warn of significant financial impacts, with some motorists facing up to £1,300 in additional costs over multi-year contracts.