Electric vehicles (EVs) have been enjoying tax breaks for years in the UK. However, starting April 2026, the government is reshaping the landscape of EV taxation. If you’re driving or planning to buy an EV, these changes to electric car tax UK 2026 could affect your running costs and financial planning.
Let’s break down what’s coming in simple terms.
Why Are the Tax Changes Happening?
The UK government introduced EV incentives to encourage people to switch from petrol and diesel cars to greener alternatives. But as EV adoption rises, tax exemptions are being phased out to balance road revenue. From 2026, electric cars will be treated more like traditional vehicles when it comes to tax.
Key Changes in Electric Car Tax UK 2026
Here’s what will change from 1 April 2026:
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VED (Vehicle Excise Duty) will apply to EVs for the first time
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BIK (Benefit-in-Kind) tax rates for company cars will rise gradually
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Road Duty will no longer be zero for EVs
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Older EVs will also be affected, not just new registrations
VED and BIK Rates Explained
Vehicle Excise Duty (VED)
| Category | Current (2025) | From April 2026 |
|---|---|---|
| New EVs (first-year rate) | £0 | Same as petrol/diesel cars based on emissions |
| Standard rate (after first year) | £0 | £165 annually (subject to updates) |
| Expensive EVs (£40,000+) | £0 | Extra £355 annual charge for 5 years |
Benefit-in-Kind (BIK) Tax
| Tax Year | Current Rate | New Rate (Planned) |
|---|---|---|
| 2025/26 | 2% | 3% |
| 2026/27 | 3% | 4% |
| 2027/28 | 4% | 5% |
| 2028/29 | 5% | 6% |
What This Means for EV Owners
For individuals and businesses, these changes bring both opportunities and challenges:
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For private EV owners: Annual running costs will increase due to VED and road duty
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For company car drivers: BIK rates will rise, but EVs will still remain cheaper compared to petrol or diesel company cars
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For fleet operators: Budgeting will need adjustments, but EVs will continue to deliver long-term savings on fuel and maintenance
Should You Still Buy an EV Before 2026?
Yes – and here’s why:
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You’ll still benefit from lower taxes until April 2026
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Even with the new VED and BIK rates, EVs will remain cheaper to run compared to petrol/diesel cars
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Growing charging infrastructure and lower maintenance costs make EVs a strong long-term investment
FAQs on Electric Car Tax UK 2026
Q1. Will electric cars start paying road tax in 2026?
Yes. From April 2026, all EVs will pay Vehicle Excise Duty (VED), ending their exemption.
Q2. How will BIK rates for electric company cars change?
BIK rates will rise gradually from 2% in 2025/26 to 6% by 2028/29, making it slightly more expensive but still lower than petrol or diesel cars.
Q3. Do existing EV owners also have to pay these new charges?
Yes. The changes apply to all EVs, not just new ones registered after 2026.
Q4. Are electric cars still worth buying after 2026?
Absolutely. Despite new taxes, EVs will remain cost-effective thanks to lower fuel costs, reduced maintenance, and environmental benefits.
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