Electric car tax in the UK now has several moving parts. Vehicle Excise Duty (VED) applies to electric cars in much the same way as to petrol and diesel cars, the expensive car supplement can add a significant annual charge to higher-priced models, and company car tax works on a separate set of rules.
This guide sets out the VED rates for electric cars and vans for the 2026/27 tax year, how the registration date and list price change what a business pays, and where benefit in kind fits. It is written for fleet managers, leasing teams and finance staff who need the numbers in a whole-life cost model, and it gives the GOV.UK pages to check before any decision.
How electric car tax works under VED
VED for a car is decided by its first registration date, and for newer cars by its CO2 emissions and list price. The GOV.UK vehicle tax rate tables treat a car registered on or after 1 April 2017 in two stages:
- First payment: a one-off rate based on CO2 emissions, paid when the car is first registered. For a zero emission car the 0 g/km band applies.
- Standard rate: a flat annual rate from the second payment onwards, which GOV.UK lists as the same for petrol, diesel, electric and alternative fuel cars.
- Expensive car supplement: an extra annual charge for cars above a list price threshold, payable for five years from the second time the car is taxed.
Rates for cars, vans and motorcycles were uprated by RPI from 1 April 2026, according to the Budget 2025 overview of tax legislation and rates, which accompanies the Budget 2025 document first published on 26 November 2025.
Electric car VED rates for 2026/27
The figures below are taken from the GOV.UK rate tables and the 2026 to 2027 table in Annex A of the Budget 2025 rates document.
| Charge | Electric car, 2026/27 | Notes |
|---|---|---|
| First payment, 0 g/km | £10 | Cars registered on or after 1 April 2017 |
| Standard rate, 12 months | £200 | Same as petrol and diesel cars |
| Standard rate, 6 months | £110 | £105 by Direct Debit |
| Expensive car supplement | £440 a year | Electric cars with a list price over £50,000 |
| Standard rate plus supplement | £640 | Single 12-month payment |
| Band A, up to 100 g/km | £20 | Cars registered 1 March 2001 to 31 March 2017 |
For a business buying a new electric car, the first-year cost is low and the ongoing cost depends on the list price. Older electric cars registered between 1 March 2001 and 31 March 2017 sit in the lowest CO2 band of the earlier system, which Annex A sets at £20 for 2026/27.
The expensive car supplement and electric cars
The supplement is the part of electric car tax most likely to change a vehicle choice. GOV.UK sets out three rules that matter for fleets:
- Threshold: £40,000 for petrol and diesel cars, and £50,000 for electric cars. Paragraph 1.56 of the Budget 2025 overview states that the zero emission threshold rises from £40,000 to £50,000 with effect from 1 April 2026, for zero emission cars registered from 1 April 2025 onwards, with legislation in Finance Bill 2025-26.
- Registration date: a zero emission car registered before 1 April 2025 does not pay the supplement.
- List price: GOV.UK defines it as the published price before first registration and before any discounts. A dealer discount that brings the invoice below the threshold does not change the list price used for VED.
The supplement is £440 a year for the five years from the second time the car is taxed, so over its full period it can add £2,200 to running costs. For example, a fleet choosing between two trims of the same model, one either side of £50,000, should model that difference explicitly rather than treat VED as a fixed overhead. Our guide to building a fleet cost model that operations can challenge explains how to keep such assumptions visible.
Electric vans and VED
The electric car tax rules above do not carry over to vans, which are taxed on a different basis. The GOV.UK other vehicle tax rates page places zero emission vans within the light goods vehicle categories rather than a separate electric class:
- light goods vehicles registered on or after 1 March 2001 and not over 3,500 kg revenue weight pay £360 for 12 months, or £198 for six months;
- Euro 4 vans registered between 1 March 2003 and 31 December 2006, and Euro 5 vans registered between 1 January 2009 and 31 December 2010, pay £140 for 12 months.
A new electric van under 3,500 kg therefore pays the same annual VED as a new diesel van. There is no list price supplement for vans. Heavier vehicles fall under separate goods vehicle rules, and the treatment of double cab pickups is covered in our forthcoming guide to company van tax.
Company car tax is a separate calculation
VED is only one part of electric car tax for a business. It is paid by the registered keeper, usually the business or the leasing company. Company car tax, or benefit in kind (BiK), is paid by the employee on the value of the car made available for private use, and the employer reports it. GOV.UK explains that the taxable value depends on what the car would cost to buy, its fuel type and its CO2 emissions. The appropriate percentages for 0 g/km cars in Annex A are:
| Tax year | Appropriate percentage, 0 g/km |
|---|---|
| 2025/26 | 3 percent |
| 2026/27 | 4 percent |
| 2027/28 | 5 percent |
| 2028/29 | 7 percent |
| 2029/30 | 9 percent |
Separately, Budget 2025 announced a per-mile Electric Vehicle Excise Duty (eVED) for electric and plug-in hybrid cars from April 2028, to be legislated in a future Finance Bill. Paragraph 2.32 of the overview says electric cars will pay half the equivalent fuel duty rate of the average petrol or diesel car and plug-in hybrids half the electric rate, alongside existing VED. As of November 2026 this is an announced policy subject to legislation, not a charge in force. If your reporting separates plug-in hybrids from battery electric cars, our article on defining BEV, PHEV and hybrid categories explains why the definitions matter.
Key points for fleet and finance teams
- A new electric car pays £10 in the first year and the £200 standard rate after that in 2026/27.
- Electric cars registered from 1 April 2025 with a list price over £50,000 pay a further £440 a year for five years.
- List price is the published price before discounts, so check it with the supplier before ordering.
- Electric vans under 3,500 kg pay the same light goods vehicle rate as diesel vans.
- BiK for 0 g/km cars rises from 4 percent in 2026/27 to 9 percent in 2029/30.
- eVED from April 2028 is announced but not yet legislated; model it as a scenario, as our guide to fleet total cost assumptions recommends.
This article is general information, not tax, legal or financial advice.
Sources
- GOV.UK: Vehicle tax rate tables
- GOV.UK: Vehicle tax rate tables, other vehicle tax rates
- GOV.UK: Budget 2025 overview of tax legislation and rates
- GOV.UK: Budget 2025 overview of tax legislation and rates, Annex A rates and allowances
- GOV.UK: Budget 2025 document
- GOV.UK: Tax on company benefits, tax on company cars
Sources checked in November 2026. Rules, rates and schemes can change after publication, so check the linked official pages before acting.
