Major change to Vehicle Excise Duty baffles millions of UK motorists

Motorists have been left confused at the UK’s new car tax rule changes which came into effect last month. Major updates to petrol, diesel, and electric Vehicle Excise Duty (VED) rates came into effect on April 1, 2025 in one of the biggest road tax overhauls.

A new poll from motoring experts at Carwow has found that over six in 10 (62%) respondents admit they don’t fully understand the changes. Meanwhile, almost two-thirds (64%) of motorists claim they are unsure whether their own car tax has actually increased. More than half (53%) of UK motorists polled in the survey stressed that they still don’t know how much the changes cost them in cash terms.

Iain Reid, Head of Editorial at Carwow, said: “Road tax might not be the most exciting part of owning a car, but it’s one of the most important — especially when changes impact every driver in the UK.

“Our research shows just how much confusion still exists post-April and highlights the urgent need for clearer communication from the government.”

Inflationary increases saw the standard VED rates rise from £190 to £195 per year while there were considerable updates to electric vehicles and first-year rates.

EV owners are now paying to use the roads for the first time with many also hit with an additional £425 Expensive Car Supplement (ECS).

Meanwhile, first-year rates doubled for many owners with the owners of the most polluting vehicles forced to pay out £5,490 per year.

Carwow’s study found that a whopping 52% of UK motorists believe the government should be doing more to support the transition towards moving to electric vehicles.

This would include providing incentives and tax reliefs where possible to make electric motoring more affordable.

Despite this, the survey found that the majority of respondents (58%) feel the tax changes would not put them off buying an electric car in the future.

Iain added: “While the flat £195 rate is simple on paper, the removal of exemptions, the new cost layers, and inflation-linked increases have clearly made things harder to track.

“People are unsure what they owe — especially when taxing a car for the first time under the new rules.

“On a positive note, the public’s support for EVs is holding firm.”