Everything you need to know about the new 2025 ‘first year road tax'

What will the first year road tax increase be in 2025?

From the 1st of April 2025, drivers purchasing a new vehicle will have to pay more for their vehicle excise duty (commonly known as first year road tax) for the first year.

The new rules will see the road tax cost double for all new cars emitting CO2 of 76g/km or more, making the highest CO2-producing vehicles the hardest hit by the new prices in cash terms. 

Where EVs are currently exempt from paying road tax, from the 1st of April 2025, the registered keepers of these cars will need to pay road tax in the same way as registered keepers of petrol and diesel cars. 

In fact, even those with relatively clean cars with the lowest CO2 g/km emissions (76g/km or less) will see significant increases in the amount of road tax they need to pay:

What is the expensive car supplement?

The expensive car supplement was first put in place by the Government in April 2017, and in simple terms, is an additional fee for drivers of cars that cost more than £40,000 when new. It’s charged as part of the road tax these drivers pay annually or monthly. 

The original rules set for the luxury vehicle tax excluded electric vehicle and zero-emission vehicle owners, however, all new cars registered after 1 April 2025 with a list price exceeding £40,000 will be subject to paying the expensive car supplement from year 2 of owning the cars (for 5 years thereafter) - even if it is an electric vehicle.

How much is the expensive car supplement?

The new—more expensive—luxury vehicle tax comes into force from the 1st of April 2025, so drivers thinking about purchasing a new car this year costing £40,000 or more (especially if it is an EV), may want to consider doing so before the end of March. 

After the 1st of April, the expensive car supplement rate will rise from £410 a year for the first five years (starting after the first tax payment when the car is a year old) to £425 per year.  

For someone purchasing an EV over £40,000, doing so on or before the 31st March 2025 will save you £2,125 in road tax if you owned the car for 6 years.