The DVLA has officially ended the vehicle tax exemption for electric cars, instituting a new £200 flat fee for most EV owners starting April 2026. Since April 2025, electric vehicles (EVs) have not been exempt from Vehicle Excise Duty (VED), meaning that all EV owners now have to pay car tax, with amounts depending on when their vehicle was registered.
For electric, zero, or low-emission vehicles registered on or after 1 April 2025, the initial tax payment is £10. However, subsequent annual payments increase to the standard rate of £195. Vehicles registered between 1 April 2017 and 31 March 2025 pay the full £195 rate. Those with registrations between 1 March 2001 and 31 March 2017 pay a reduced rate of £20.
Fuel duty remains a significant contributor to road tax revenue, currently set at 52.95p per litre and expected to rise in September 2026. At the time of writing, petrol averages 153.2p per litre, nearly half of which goes toward tax.
Electric vehicle popularity has surged, with over 473,000 EVs registered in 2025, capturing a 23.4% market share. Despite this growth, the introduction of the new tax could deter potential buyers.
The RAC provides clarification: from 1 April 2026, all petrol, diesel, and hybrid cars registered after 1 April 2017 will face a standard £200 tax rate. Paying for six months costs £110, or £105 with direct debit setup. Monthly payments total £210 annually.
Additionally, vehicles with a list price exceeding £40,000 (£50,000 for electric cars) may incur a luxury car tax of £440, raising the total annual VED to £640.
Tax fees vary depending on the vehicle’s registration year, fuel type, and emissions levels. Importantly, electric cars are no longer eligible for free road tax, and drivers of electric vehicles under one year old will start paying the £200 flat tax rate in April 2026.