EV Road Tax 2026 Guide

For much of the last decade, one of the biggest financial incentives for owning an electric vehicle (EV) in the UK was exemption from Vehicle Excise Duty (VED), commonly known as road tax. That exemption has now ended.

From 1 April 2025, electric cars became subject to VED for the first time. As we move through 2026, these rules are now fully in force, meaning EV owners and buyers must factor road tax into the real cost of ownership in the same way as petrol and diesel drivers.

This guide explains how EV road tax works in 2026, who pays what, how much it costs, and what it means for EV buyers, fleet drivers and the wider UK electric car market.

What Is Vehicle Excise Duty (VED)?

Vehicle Excise Duty (VED) is an annual tax paid on vehicles that are driven or kept on public roads in the UK. The amount you pay depends on:

• When the vehicle was first registered
• The type of fuel it uses
• Its list price (for newer cars)

VED is paid yearly, usually by monthly Direct Debit or annual payment.

Why Did EV Road Tax Change?

The original VED exemption for electric cars was introduced to accelerate EV adoption. However, with well over a million EVs now on UK roads, the government moved to bring electric cars into the standard tax system to protect long-term tax revenues.

From April 2025 onwards, EVs are no longer treated as a special exemption class for road tax purposes.

EV Road Tax Rules in 2026 (What You Pay)

EVs Registered Between 1 April 2017 and 31 March 2025

• Annual VED: £195 per year
• First-year rate: Not applicable (already registered)
• Expensive Car Supplement: Not applicable

This applies to the majority of EVs already on the road today.

EVs Registered On or After 1 April 2025

• First-year VED: £10
• From year two onwards: £195 per year
• Expensive Car Supplement: £390 per year for five years if list price exceeds £40,000

This is the group most affected by the changes, particularly buyers of higher-end electric cars.

EVs Registered Before 1 April 2017

• Annual VED: £20 per year

Older EVs fall into a lower tax band, making them some of the cheapest vehicles in the UK to tax.

EV Road Tax Costs at a Glance (2026)

What Is the Expensive Car Supplement and How Does It Affect EVs?

The Expensive Car Supplement applies to cars with a list price above £40,000, regardless of fuel type.

For EVs registered from April 2025:

• You pay an extra £390 per year
• It applies for five years
• It starts from the second year of ownership

This has a significant impact on premium EVs and explains why many manufacturers are now pricing models just under the £40,000 threshold.

Can EV Owners Still Avoid Road Tax?

No.
As of 2026, there are no remaining exemptions or renewal loopholes. All eligible EVs must now be taxed in line with current VED rules.

EVs that were renewed before April 2025 have now rolled into the paid tax system.

What Does This Mean for EV Buyers in 2026?

Higher Running Costs (But Still Competitive)

EVs are no longer “tax-free,” but running costs remain lower overall compared to petrol and diesel cars when fuel, servicing and Benefit-in-Kind tax are considered.

Used EVs Look Better Value

EVs registered before April 2017 are particularly attractive thanks to their £20 annual tax rate. This is helping stabilise used EV values.

Premium EV Buyers Need to Budget Carefully

Cars over £40,000 now attract thousands of pounds in extra VED over five years, making salary sacrifice and company car schemes even more important for cost control.

What Does This Mean for the UK EV Market?

• Short-term hesitation: Some private buyers delayed purchases around the 2025 change
• Stronger used EV demand: Lower-tax older EVs have become more appealing
• More focus on salary sacrifice: Low EV BiK rates increasingly offset VED costs
• Manufacturer pricing pressure: More EVs are being priced below £40,000

Overall, the tax change has reshaped buying behaviour rather than stopped EV adoption.

FAQs: EV Road Tax in 2026

Do electric cars pay road tax in 2026?

Yes. All electric cars now pay Vehicle Excise Duty (VED) under standard rules.

How much road tax do EVs pay per year?

Most EVs pay £195 per year. Older EVs registered before April 2017 pay £20 per year.

Do new electric cars still get free road tax?

No. EVs registered from April 2025 pay £10 in the first year, then £195 per year.

Do EVs pay the expensive car supplement?

Yes, if the list price is over £40,000, EVs registered from April 2025 pay an extra £390 per year for five years.

Are hybrids affected by the same rules?

Hybrid cars were already subject to VED and continue to be taxed based on existing emissions-based rules.

Does road tax apply to salary sacrifice EVs?

Yes. VED is included in the leading salary sacrifice schemes, meaning employees usually don’t see it as a separate cost.

Is EV road tax likely to increase further?

VED rates typically rise in line with inflation, so gradual increases over time are likely.

The Final Word on EV Road Tax in 2026

The introduction of road tax for electric vehicles marks the end of a long-standing incentive, but it does not remove the financial case for going electric.

While EVs are no longer exempt from VED, they still benefit from:

• Lower fuel costs
• Reduced maintenance
• Very low Benefit-in-Kind tax
• Strong salary sacrifice savings

For most drivers in 2026, EV ownership remains cheaper overall — just no longer completely tax-free.

Disclaimer:
Electric Car Guide does not provide tax advice. This article is for informational purposes only and reflects UK VED rules as of January 2026. Tax legislation may change. Always check the official government website or speak to an accountant for advice specific to your situation.

John Ellmore

John is the Editor and Spokesperson for Electric Car Guide.

With over 20 years of writing experience, he has written for titles such as City AM, FE News and NerdWallet.com, covering various automotive and personal finance topics.

John’s market commentary has been covered by the likes of The Express, The Independent, Yahoo Finance and The Evening Standard.