For years, one of the quiet financial perks of running electric vehicles was a zero vehicle excise duty bill. That era ended on 1 April 2025, when electric, zero and low emission vehicles were brought into the vehicle tax system. The change applies to both new and existing vehicles - so every electric van and truck already on the fleet moved onto the tax roll, not just new registrations. Fleets planning electric purchases now need VED in the whole-life cost model, and fleets already running electric need it in the budget.
The government’s guidance is direct: you need to pay vehicle tax if you have an electric, zero or low emission car, van or motorcycle, a change introduced on 1 April 2025 that applies to both new and existing vehicles, with the amount depending on the type of vehicle and when it was registered. The exemption did not fade; it stopped, on a single date, for the whole parc.
The rates applying from 1 April 2026 to 31 March 2027 show the shape. For electric, zero or low emission cars registered on or after 1 April 2025, the first year costs £10, after which the standard rate of £200 applies. Cars registered between 1 April 2017 and 31 March 2025 pay the standard rate of £200. Cars registered between 1 March 2001 and 31 March 2017 pay the standard rate of £20 for their band.
Two smaller changes came with the package. The £10 annual discount for hybrid and alternative fuel vehicles has been removed - hybrids now pay according to when they were first registered: the CO2-based rate for vehicles registered before 1 April 2017, or the standard £200 rate for those registered on or after that date. And the expensive car supplement - the additional rate paid for five years on cars with a list price above the threshold - now applies to electric cars registered on or after 1 April 2025, ending another EV-specific break.
For the commercial fleet the key line is about vans: most electric vans have moved to the standard annual rate for light goods vehicles. So an electric Transit’s VED is simply the standard LGV rate - no premium, but no exemption either. Electric motorcycles and tricycles moved to the annual rate for the smallest engine size.
Heavy goods vehicles sit in their own VED bands, which were never zero-rated in the same way as electric cars and vans - HGV VED is banded by weight, axle configuration and levy class, and the HGV road user levy runs alongside it. The April 2025 change is therefore felt most sharply in the van and company-car part of a fleet’s operation rather than the artic fleet. Fleets scoping electric vans should simply cost VED at the standard LGV rate from year one, with no EV discount in the model.
Three practical consequences. First, whole-life cost comparisons: the old electric-versus-diesel sums that included a VED saving need rework - the saving is gone for cars and vans, though the fuel-cost and maintenance advantages that actually drive the electric van business case are untouched. Second, the admin: existing electric vehicles had to be taxed from April 2025 even where the amount due was nil in the transition; fleets should confirm every EV on the fleet shows as taxed on the DVLA record, because an untaxed vehicle is an untaxed vehicle whatever the rate. Third, salary sacrifice and company car schemes: benefit-in-kind remains heavily favourable for electric cars, but the VED line now sits in the cost stack where previously it did not.
Electric vehicle tax is no longer a blank page. Cars pay £10 in year one then £200; older electrics pay £200 or £20 by band; electric vans pay the standard LGV rate; hybrids lost their discount; and the expensive car supplement reaches electric cars too. None of it reverses the electric business case - but all of it belongs in the budget from 1 April 2025 onward.
Rates and bands move at fiscal events, so the working habit is to check the current tables rather than assume last year’s figure. The government’s vehicle tax rate pages publish the current bands for every vehicle class, and the electric vehicle tax guidance is updated with each rate year - the figures quoted here are the 1 April 2026 to 31 March 2027 position. For a mixed fleet the practical step is an annual VED audit: every vehicle’s tax status, rate and renewal date on one register, reviewed when the new rates land each spring. It takes an hour, it catches the van nobody taxed after the April 2025 change, and it turns a scattered admin task into a single predictable one.