If you drive an electric car in the UK, the days of free road tax are over. Since 1 April 2025, every zero-emission vehicle must pay Vehicle Excise Duty (VED). Rates remain far lower than those for high-emission petrol or diesel cars in the first year, but from year two onwards EV drivers pay the same standard rate as everyone else.
This guide covers the 2026/27 VED rates for electric cars, the important changes to the expensive car supplement threshold, the upcoming eVED per-mile charge from 2028, and what all of this means if you use an EV for business.
What Changed in April 2025
Before 1 April 2025, battery electric vehicles were completely exempt from VED. That exemption was scrapped as EV uptake accelerated and the Treasury needed to address a growing shortfall in road-funding revenue from fuel duty.
From April 2025 onwards, zero-emission cars are taxed as follows:
- First-year rate for new EVs: £10
- Standard rate from year two: £195, rising to £200 from April 2026 (in line with RPI)
- EVs registered before 1 April 2025: moved straight to the standard rate
- EVs registered before April 2017: pay £20 per year
The first-year rate of £10 is still dramatically cheaper than petrol or diesel equivalents. A typical family petrol car emitting around 140 g/km of CO2 pays roughly £895 in its first year, while a high-emission vehicle can pay over £5,490.
2026/27 VED Rates for Electric Cars
From 1 April 2026, the standard rate of VED rises from £195 to £200 per year for cars first registered after April 2017. Here is the full picture for EV owners:
| Registration date | List price | Annual VED (2026/27) |
|---|---|---|
| From 1 Apr 2025 (year 1) | Any | £10 |
| From 1 Apr 2025 (year 2+) | Under £50,000 | £200/yr |
| From 1 Apr 2025 (year 2+) | Over £50,000 | £200 + £440 = £640/yr |
| Apr 2017 – Mar 2025 | Under £40,000 | £200/yr |
| Apr 2017 – Mar 2025 | Over £40,000 | £200 + £440 = £640/yr |
| Before Apr 2017 | Any | £20/yr |
Even at £200 per year, the standard rate is modest compared to first-year VED for combustion vehicles. The real cost to watch is the expensive car supplement — and that has just become more favourable for EV buyers.
The Expensive Car Supplement: £50,000 Threshold for EVs
The expensive car supplement is an additional charge on top of the standard rate, payable for the first five years after year one if your vehicle’s original list price exceeds a set threshold.
From 1 April 2026, the threshold for zero-emission cars rises from £40,000 to £50,000. The threshold for petrol, diesel, and hybrid vehicles stays at £40,000. This change applies retrospectively to EVs registered on or after 1 April 2025, so if you bought a new EV priced between £40,000 and £50,000 after that date, you will no longer owe the supplement.
The supplement itself is £440 per year (from April 2025), meaning affected EV owners pay a total of £640 per year during years two to six.
This matters because the average price of a new electric car in the UK is around £48,000. Raising the threshold to £50,000 exempts a significant number of popular models — including most variants of the Tesla Model 3 and Model Y, the MG4, and many mid-range EVs — from the supplement entirely.
Remember that the threshold is based on the manufacturer’s original list price including factory options, not the price you actually paid. Dealer discounts and negotiated reductions do not count.
eVED: The Per-Mile Charge from April 2028
The government announced at Budget 2025 that a new Electric Vehicle Excise Duty (eVED) will be introduced from April 2028. This is a mileage-based charge designed to replace some of the fuel duty revenue lost as drivers switch to electric.
Key details from the consultation:
- Battery electric cars: 3p per mile
- Plug-in hybrid cars: 1.5p per mile
- Average annual cost: roughly £240 per year for a typical EV driver covering 8,000 miles
- How it works: you estimate your annual mileage at VED renewal, pay the eVED alongside your VED (monthly, half-yearly, or annually), then submit an actual odometer reading at year end for reconciliation
- No GPS tracking required: the system relies on odometer readings, not real-time location data
The rate will increase annually in line with CPI. Even with eVED added, the total per-mile running cost of an EV (around 5p including electricity) remains substantially cheaper than petrol at roughly 15p per mile.
Vans, motorcycles, buses, and HGVs are currently out of scope. For more detail on how pay-per-mile road pricing fits the wider picture, see our guide on pay-per-mile road tax in the UK.
What This Means for Business EV Owners
If you drive an electric company car or use an EV for self-employed business journeys, these VED changes affect your total cost of ownership — but they do not undermine the core tax advantage of going electric.
Benefit in Kind remains at 2%. Company car drivers still enjoy a BIK rate of just 2% on electric vehicles through 2027/28. On a £40,000 EV, a 40% taxpayer pays roughly £320 per year in BIK tax — a fraction of the cost for an equivalent petrol car. VED of £200 per year barely dents this saving. For the full breakdown, see our guide on electric company car tax in the UK.
Capital allowances are unaffected. Businesses purchasing EVs outright can still claim 100% first-year capital allowances, writing off the entire cost against profits. More on this in our guide to capital allowances on cars.
Salary sacrifice schemes typically include VED. If you receive an EV through salary sacrifice, your employer usually covers VED as part of the running costs. Check with your provider whether this extends to eVED from 2028. Our salary sacrifice guide covers the current arrangements.
Mileage tracking becomes more important than ever. With eVED introducing a per-mile charge, accurately separating business and personal miles is critical — both for HMRC mileage claims and to ensure you are not overpaying on eVED. Tripbook records every journey with GPS, automatically categorises business trips, and exports HMRC-ready reports.
How to Track Your EV Running Costs
Whether you claim mileage at the HMRC advisory rate or use the actual costs method, you need a contemporaneous mileage log. Making Tax Digital (from April 2026) requires digital record-keeping, and eVED from 2028 will make odometer accuracy even more important.
Tripbook handles all of this automatically. The app tracks every journey in the background, lets you tag trips as business or personal with a single swipe, and produces a digital log that satisfies HMRC requirements. If you drive an electric car for work, having your mileage data in one place makes VED reconciliation, expense claims, and year-end tax returns far simpler.
Download Tripbook from the App Store and start logging your EV business miles today.
Summary
Electric car road tax in 2026/27 is straightforward: £10 in year one, £200 per year thereafter, plus the £440 expensive car supplement if your EV listed above £50,000 (or £40,000 for models registered before April 2025). From April 2028, eVED adds a 3p-per-mile charge on top.
For business drivers, the combination of 2% BIK, 100% capital allowances, and comparatively low VED still makes electric vehicles the most tax-efficient company car option available. The key is to keep accurate mileage records — something Tripbook makes effortless.
