How Much Is Electric Car Road Tax in 2026, and What Changes in 2028?
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The electric car road tax applies to every EV registered from 1 April 2025, ending the tax-free status EVs have held for over a decade. Drivers now pay a £10 first-year rate, then the £200 standard Vehicle Excise Duty (VED) rate from year two, plus an Expensive Car Supplement for electric cars priced above £50,000. A further change takes effect in April 2028, when a new pay-per-mile eVED charge is added on top of the standard VED.
None of this changes the case for going electric. Electric car road tax still costs a fraction of what higher-emission petrol and diesel cars pay, and Benefit-in-Kind rates remain far lower for electric cars. This guide sets out exactly what you'll pay in 2026/27, what's changing in 2028, and how salary sacrifice absorbs the cost.
Do Electric Cars Pay Road Tax in 2026?
Yes, electric cars pay road tax in 2026, following the end of the VED exemption on 1 April 2025. HM Treasury removed the long-standing exemption for zero-emission vehicles to address falling fuel duty revenue as EV adoption increased, a decision confirmed under the Finance Act 2023 and unchanged by the current government.
The rate you pay depends on when your car was first registered. New electric cars registered from 1 April 2025 pay a £10 first-year rate, then move to the standard £200 rate from year two. Electric cars registered between 1 April 2017 and 31 March 2025 also pay £200 from their first renewal after 1 April 2025. Only electric cars registered before 1 April 2017 keep the older, lower £20 flat rate.
Electric Car Road Tax Rates for 2026/27
The table below sets out what electric car owners pay depending on registration date, alongside the equivalent petrol and diesel rates for comparison.
| Registration date | Year one rate | Year two onwards (2026/27) | Expensive Car Supplement |
|---|---|---|---|
| From 1 April 2025 | £10 | £200/year | £440/year (years 2 to 6) if list price exceeds £50,000 |
| 1 April 2017 to 31 March 2025 | N/A | £200/year | Not liable |
| Before 1 April 2017 | N/A | £20/year | Not liable |
For context, here's how electric car road tax compares with petrol and diesel once a vehicle is past its first year.
| Vehicle type | Standard VED (year 2+) | Expensive Car Supplement threshold | BiK rate 2026/27 |
|---|---|---|---|
| Electric car | £200 | £50,000 | 4% |
| Petrol or diesel car | £200 | £40,000 | Up to 37% |
The Expensive Car Supplement, sometimes called the "£40,000 car tax rule," is based on a car's original list price as registered with the DVLA, not the price a buyer eventually pays, and applies for five years from a vehicle's second tax payment. Electric cars now sit at a higher £50,000 threshold than petrol and diesel cars, which keeps many mainstream EVs out of the supplement altogether. See our guide to electric car grants and tax benefits for how this threshold interacts with current incentives.
Worked Example: Luxury Electric vs Petrol SUV
Here's what the numbers look like for a higher-rate taxpayer comparing a luxury electric SUV with a comparably sized petrol equivalent, using the BMW iX xDrive45 against the BMW X7 xDrive40i, both official BMW UK on-the-road prices.
| BMW iX xDrive45 (Electric) | BMW X7 xDrive40i (Petrol) | |
|---|---|---|
| List price (OTR) | £75,405 | £93,280 |
| BiK rate 2026/27 | 4% | 37% (maximum band) |
| Annual BiK tax (40% taxpayer) | £1,206 | £13,805 |
| Standard VED (year 2+) | £200 | £200 |
| Expensive Car Supplement | £440/year (over £50,000 threshold) | £440/year (over £40,000 threshold) |
| Total annual tax (years 2 to 6) | £1,846 | £14,445 |
The Benefit-in-Kind (BiK) gap shown here, 4% against the maximum 37% rate, means the petrol equivalent's annual tax bill is many times higher than the electric SUV's even before VED and the Expensive Car Supplement are added, and that gap only grows with a higher list price.
What Changed on 1 April 2025 and 2026
Two separate changes affect electric car owners, and it's worth keeping them apart. The first, from 1 April 2025, ended the VED exemption entirely: electric cars became liable for the same first-year and standard rate structure as petrol and diesel cars, and new electric cars over £40,000 briefly became liable for the Expensive Car Supplement on the same terms as combustion vehicles.
The second change, from 1 April 2026, adjusted the rates in line with Retail Price Index inflation and raised the Expensive Car Supplement threshold for electric cars specifically, a change confirmed by the House of Commons Library's briefing on vehicle excise duty and applied retrospectively to electric cars registered from April 2025 onwards. Petrol, diesel and hybrid cars keep the original £40,000 threshold, so this adjustment benefits electric cars only.
What's Coming in 2028: Pay-Per-Mile eVED
From April 2028, a new Electric Vehicle Excise Duty (eVED) system introduces a pay-per-mile charge for electric and plug-in hybrid cars, on top of the standard VED rates covered above. Electric cars will pay 3p per mile and plug-in hybrids will pay 1.5p per mile, with both rates set to rise in line with inflation from 2029.
The government has indicated that mileage will most likely be verified at MOT test centres rather than through a tracking device, addressing one of the main privacy concerns raised during the consultation. Higher-mileage drivers, including many company car and salary sacrifice users, will pay proportionately more, though electric cars remain considerably cheaper to tax overall than an equivalent petrol or diesel car.
The actual cost depends heavily on annual mileage:
| Model | Annual mileage | Annual eVED (from 2028) |
|---|---|---|
| MG4 | 8,500 miles | £255 (£21.25/month) |
| Volkswagen ID.4 | 10,000 miles | £300 (£25/month) |
| Tesla Model Y | 12,000 miles | £360 (£30/month) |
You can run your own numbers, based on your specific mileage and model, using our pay-per-mile road tax calculator, one of the UK's top-ranking tools for this topic. Our pay-per-mile road tax guide covers the consultation and monitoring details in full.
Which Electric Cars Are Exempt From Road Tax?
Very few electric cars remain exempt from road tax today, and the exemptions that do apply are narrow.
EVs registered before 1 March 2001 are not liable for VED under the pre-2001 engine-size-based system.
Vehicles declared off the road with a Statutory Off Road Notice (SORN) don't attract VED while the notice is in place.
Some vehicles used by disabled drivers may qualify for a separate VED exemption, regardless of fuel type.
Outside these categories, electric cars registered from 1 April 2017 onwards pay VED in the same way as petrol and diesel cars, at a higher £50,000 Expensive Car Supplement threshold.
How Does Salary Sacrifice Save on Road Tax and BiK?
Road tax is bundled into a salary sacrifice monthly payment alongside insurance, servicing and breakdown cover, so a VED increase doesn't create a separate bill for the driver. What keeps electric car salary sacrifice worthwhile despite rising VED is the tax relief that applies before VED is even factored in:
A higher-rate taxpayer saves 40% in income tax and 2% in employee National Insurance on the amount sacrificed.
Employers typically save 15% employer National Insurance on the same amount, one reason the scheme costs the business nothing to run.
Benefit-in-Kind stays at 4% for 2026/27, against up to 37% for an equivalent petrol or diesel company car, as set out in our Benefit-in-Kind guide.
Even with higher VED and the 2028 eVED charge folded in, employees typically save 20 to 50% against a personal lease, since VED is a small proportion of the total monthly cost against these tax reliefs. See the full breakdown using our salary sacrifice savings calculator.
What Does This Mean For Fleet Managers?
For HR Directors and Fleet Managers, the bigger question is how a rate rise across the fleet is managed, not what one employee pays. VED, the Expensive Car Supplement and the coming eVED charge are all covered under Complete Employer Protection, which locks in the scheme cost regardless of mid-contract tax changes, a meaningful safeguard given VED has moved twice in the last 12 months. Fleet-level planning also benefits from understanding P11D values alongside the supplement threshold, and how EV ownership affects corporation tax.
"We do understand the need to charge road tax on electric cars to help fund the road network, so we're not against the principle of these changes. What matters more to employers is predictability. With Complete Employer Protection, a VED rise or a new charge like eVED doesn't land as a surprise mid-contract cost, and that's what lets a Fleet Manager commit to electric with confidence."
Thom Groot, Co-Founder and CEO, The Electric Car Scheme
Frequently Asked Questions
How Much Will Electric Car Tax Be in 2028?
From April 2028, electric car owners pay standard VED plus a new eVED charge of 3p per mile. For a driver covering 8,000 miles a year, that adds around £240 on top of the £200 standard rate, taking the total to roughly £440 for a typical mileage profile. Higher-mileage drivers will pay more, in proportion to the miles they cover.
How Will the New Electric Car Tax Work?
The eVED system charges electric and plug-in hybrid drivers a flat rate per mile, on top of existing VED. The government has proposed verifying mileage at MOT test centres rather than through a dedicated tracking device.
What Is the £50,000 Car Tax Rule?
Electric cars with an original list price above £50,000 are liable for the Expensive Car Supplement, an extra £440 a year for five years from their second tax payment. The threshold rose from £40,000 to £50,000 for electric cars from April 2026; petrol, diesel and hybrid cars remain at £40,000.
What Electric Cars Are Exempt From Road Tax?
Only electric cars registered before 1 March 2001, vehicles formally declared off the road under a SORN, and some vehicles used by disabled drivers are exempt from VED. Electric cars registered from 1 April 2017 onwards pay the standard rate in the same way as petrol and diesel cars.
What Is the Road Tax for Electric Cars in 2026?
For 2026/27, new electric cars pay £10 in their first year, then £200 a year from year two. Electric cars priced above £50,000 also pay the £440 Expensive Car Supplement for five years, on top of the standard rate.
Do Electric Cars Need Road Tax?
Yes, electric cars need road tax if they're used or kept on a public road. The only way to avoid paying is to formally declare the vehicle off the road with a SORN, which means it can't be driven or parked on public roads until the notice is lifted.
Electric car road tax has changed twice in two years: the VED exemption ended in April 2025, then rates rose, and the Expensive Car Supplement threshold increased in April 2026. A further pay-per-mile eVED charge arrives in April 2028, adding a modest per-mile cost for electric and plug-in hybrid drivers.
None of this alters the fundamental gap between electric and combustion vehicle taxation. Electric cars still pay less VED than equivalent petrol and diesel models once the Expensive Car Supplement is applied, and Benefit-in-Kind rates remain far lower for electric cars than for anything else on the road. For salary sacrifice drivers, VED and the coming eVED charge are already built into the monthly cost, so these changes don't create a new bill to plan around.
The Electric Car Scheme is rated Excellent on Trustpilot with a 4.8 TrustScore and was named EV Salary Sacrifice Provider of the Year 2026 by SME News, built on the same approach to tax accuracy set out in our EV salary sacrifice statistics report.
See how much you could save on an electric car through salary sacrifice, VED included, with our savings calculator.
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Last updated: 28.07.26
Our pricing is based on data collected from The Electric Car Schemequote tool. All final pricing is inclusive of VAT. All prices above are based on the following lease terms; 10,000 miles pa, 36 months, and are inclusive of Maintenance and Breakdown Cover. The Electric Car Scheme’s terms and conditions apply. All deals are subject to credit approval and availability. All deals are subject to excess mileage and damage charges. Prices are calculated based on the following tax saving assumptions; England & Wales, 40% tax rate. The above prices were calculated using a flat payment profile. The Electric Car Scheme Limited provides services for the administration of your salary sacrifice employee benefits. The Electric Car Scheme Holdings Limited is a member of the BVRLA (10608), is authorised and regulated by the FCA under FRN 968270, is an Appointed Representative of Marshall Management Services Ltd under FRN 667174, and is a credit broker and not a lender or insurance provider.
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