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UK Drivers Receive Tax Notices Following Major Vehicle Excise Duty Overhaul

New VED rules end electric vehicle exemptions, increase rates across all vehicle types, and impose supplemental charges on high-value cars.

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Overview

  • As of May 2025, DVLA tax reminders are being sent to UK drivers under the updated Vehicle Excise Duty (VED) system implemented in April.
  • Electric vehicles, previously exempt, now face a flat annual charge of £195, with an additional £425 supplement for models priced over £40,000.
  • Petrol and diesel cars registered between 2001 and 2017 are taxed based on CO₂ emissions, with annual rates ranging from £20 to £600.
  • Plug-in hybrid vehicles see a £100 increase in first-year VED, now set at £110, as part of efforts to encourage cleaner vehicle choices.
  • Baby boomers, with low EV adoption rates, are expected to collectively pay £40.5 million more in VED under the new system.