UK Road Tax Increase in 2025: A Consumer-Friendly Guide.

What Is Road Tax and Why Is It Increasing in 2025?

Road tax – officially known as Vehicle Excise Duty (VED) – is the annual tax you pay to keep a vehicle on UK roads. It’s a charge based on your vehicle’s type and emissions, and it helps fund public services (though it’s not directly tied to road maintenance). 

Starting 1st April, 2025, the UK government is raising road tax rates and changing how some vehicles are taxed. These changes were announced to make the system “fairer” – ensuring all drivers contribute their share – and to account for inflation and the growing number of electric vehicles on the road​

In practical terms, this means many drivers will see higher tax bills in 2025, and electric cars will no longer be exempt from road tax.

Notes: The “First-Year Road Tax” is often called the showroom tax, paid when the car is first registered. The Annual Standard Tax is the flat rate you pay each year thereafter (for cars registered after April 2017)​

Why Buying a New BMW Before April 2025 Could Save You Money.

If you’re considering a new car – especially a new BMW – you might want to act before the end of March 2025. Here’s why buying a new BMW (or any car) before the April tax hike can be beneficial:

- Avoid Higher First-Year Tax Bills: By purchasing and registering your car before April 1, 2025, you’ll lock in the current (lower) first-year road tax rates. Many BMW models have powerful engines or higher emissions, which means their first-year VED is set to jump significantly after April. For example, the first-year tax on a BMW X5 M60i will roughly double. Increasing by about £2,745 extra if you register it on or after April 1, 2025​

- Last Chance for £0 Tax: If you’re eyeing an electric BMW (like the i4, iX, or i7), purchasing before 1 April 2025 lets you take advantage of the final period of £0 road tax. 

- Lower Ongoing Costs for Expensive Models: Many BMWs have a list price above £40,000, which means they’re subject to the luxury car supplement in years 2–6. This fee is going up slightly in 2025 (to £425/year)​

- If you buy before April, you’ll still have to pay this supplement (if applicable), but you might get it at the slightly lower rate (around £410) for the first cycle and, in the case of EVs, you’d have avoided it entirely until the new rules begin. The primary savings, however, remain that first-year tax. By beating the deadline, you won’t pay the inflated first-year VED that 2025’s new rules demand.

In summary, buying a new BMW (or any new car) before April 2025 can result in significant tax savings. You’ll benefit from the current, lower tax rates: electric cars stay tax-free for now, hybrids and efficient cars avoid the new first-year charges, and petrol/diesel models escape the huge hike in the showroom tax. For high-end models, the difference can be thousands of pounds saved.

If you’re in the market for a new car, it’s a good idea to factor in these tax changes – purchasing before the end of March 2025 could keep some of your hard-earned money in your pocket.

By understanding these upcoming road tax changes, you can plan your car purchase smartly and avoid surprises. The 2025 VED increase is aimed at making sure everyone – including electric vehicle owners – contributes to road tax​

But with a little timing and knowledge, consumers can minimise the impact on their wallets. Hopefully, this guide will help clarify what’s changing and how it affects your vehicle, so you can drive into 2025 informed and prepared.

Vehicles Affected by the 2025 Road Tax Changes

Almost all vehicles are impacted by the 2025 road tax increase – from zero-emission electric cars to petrol SUVs. Below is a breakdown of how different vehicle types will be affected:

Electric Vehicles (EVs)

- New EVs will pay road tax: Electric cars have been exempt from VED, but from April 2025 this changes. If you register a new electric car after 1 April, 2025, you’ll pay a first-year road tax of £10 (a nominal fee). From the second year onwards, the EV will be charged the standard annual rate (the same as petrol/diesel cars, about £195 per year in 2025).

- “Luxury” electric cars over £40k: Currently, vehicles with a list price over £40,000 pay an extra fee each year for 5 years (years 2–6 of ownership), but EVs were exempt. From April 2025, electric cars above £40,000 will also incur this “Expensive Car Supplement” of about £425 per year (on top of the standard rate) for five years. In other words, a pricey new EV will cost roughly £620 per year in road tax from year 2 through year 6 (standard £195 + £425 luxury supplement).

(What this means: If you buy a new EV after April 2025, you’ll pay £10 in the first year, then about £195 each year (or £620 if the car’s list price was over £40k) in the following years. Before this change, EV owners paid £0, so this is a significant shift.)

Hybrid and Low-Emission Vehicles.

- Plug-in hybrids (1–50 g/km CO2): Cars that emit very little CO2 – typically plug-in hybrid vehicles – will have a higher first-year tax. Currently many of these cars pay £0 in the first year (if they’re ultra-low emissions)​. From April 2025, the first-year VED for vehicles emitting 1–50 g/km CO2 will be £110​. This is a new cost for most plug-in hybrids, which previously enjoyed a free first year (petrol/diesel cars in this band used to pay only £10). 

- Other low-emission cars (51–75 g/km CO2): The next band up (which can include some efficient hybrids or very efficient petrol/diesel models) will also see an increase. First-year tax for 51–75 g/km cars is rising to £135​. (Previously, a car in this band paid around £30 in the first year, or £20 if it was a hybrid​.) This means even eco-friendly cars will have a larger “showroom tax” when first registered.

Petrol and Diesel Cars (Traditional Fuel Vehicles)

- Higher first-year “showroom tax”: If you’re buying a new petrol or diesel car, especially one with moderate or high CO2 emissions, expect a much bigger first-year tax bill. For most cars emitting above 75 g/km CO2, first-year VED rates will roughly double from April 2025. This increase affects the majority of standard petrol/diesel cars. For example, a typical family hatchback like a VW Golf 1.5 TSI might see about £220 more in first-year tax than before​. Higher-emission models face an even steeper hike – a powerful SUV like a BMW X5 M60i could incur an extra £2,745 in first-year tax if registered after the change. (In practical terms, that X5’s first-year tax would roughly double, soaring from around £2,745 to £5,490​)

- Annual rate (year 2 onward): After the first year, all petrol and diesel cars move to a flat standard rate for road tax. From April 2025, that standard rate will be £195 per year for any car (regardless of engine size or CO2)​. This is a slight increase from the previous £190 standard rate. If your petrol/diesel car had a list price above £40,000, it will also carry the £425 “luxury” supplement in years 2–6, just as before (that supplement is increasing slightly from £410 to £425)​. Essentially, aside from the first-year spike, the ongoing yearly tax for petrol and diesel vehicles will be roughly the same for everyone, with expensive cars paying extra.

(Summary for petrol/diesel buyers: Any new car you buy after 1 April, 2025 will cost more in road tax upfront – potentially double the current amount for the first year. After that first year, you’ll pay the new standard rate of £195 each year. Plus any luxury car fee if the car was over £40k)

New Road Tax Bands and Rates from April 2025.

To clarify the changes, the table below shows the updated Road tax bands effective before and after 1 April, 2025. The bands are based on a vehicle’s CO2 emissions and highlight how different vehicle types (electric, hybrid, petrol, etc.) will be taxed under the new system: