Starting from April 1, 2026, the UK government is officially implementing revised electric car tax UK 2026 rules that affect both new and existing electric vehicle (EV) owners. These changes are part of the UK’s broader efforts to balance road maintenance funding while encouraging eco-conscious vehicle adoption. All EV drivers in the UK should now be aware of the new VED (Vehicle Excise Duty) and BIK (Benefit-in-Kind) rates, which apply uniformly from the 2026–27 tax year.
While EVs have long benefited from generous tax exemptions and incentives, the latest policy updates aim to standardize road contributions across all types of vehicles — petrol, diesel, hybrid, and electric. Let’s explore how these new policies affect you as an EV owner or potential buyer.
VED (Vehicle Excise Duty) Rates for Electric Cars – 2026 Onwards
From 1st April 2026, zero-emission vehicles registered from 1 April 2017 will no longer enjoy the £0 VED rate. Instead, they will pay the same flat rate of £190 per year, in line with petrol and diesel cars. Vehicles registered before this date will also be subject to a modest VED charge.
VED changes under electric car tax UK 2026 include:
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New zero-emission vehicles: £190 standard rate after first year
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Existing EVs (pre-2026): Gradual introduction of VED by tax band
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Luxury EVs (over £40,000): Additional surcharge of £390 annually for 5 years
This marks the end of the free ride for electric vehicles, but the government maintains it’s a necessary step toward fairness and road funding equity.
BIK (Benefit-in-Kind) Rates for Company Car EVs
The BIK rates for EVs, especially for company cars, are also evolving under the electric car tax UK 2026 reform. These low-emission perks have been key in boosting EV fleet uptake across the UK. From 2025–26 onwards, the BIK rate will incrementally increase each tax year.
Key BIK changes in the UK for electric cars:
| Tax Year | BIK Rate for EVs |
|---|---|
| 2024–25 | 2% |
| 2025–26 | 3% |
| 2026–27 | 4% |
| 2027–28 | 5% |
This predictable rise gives employers and fleet managers time to adjust their calculations and helps the Treasury recover revenue as EVs become more mainstream.
Why the Electric Car Tax UK 2026 Update Matters
According to the Department for Transport, EVs accounted for more than 25% of all new car sales in the UK by mid-2025. The electric car tax UK 2026 update was deemed necessary to ensure that all road users contribute fairly to the upkeep of infrastructure. The government maintains that this will not slow down EV adoption, as other grants, congestion charge exemptions, and clean air benefits still apply.
For everyday UK car owners, the tax changes signal a transition period where EVs are still cheaper to run than internal combustion vehicles — but not entirely free from annual ownership costs anymore.
Should You Still Buy an EV in 2026?
Absolutely. Despite the new tax charges, EVs still deliver:
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Lower running costs (fuel savings of 60–70%)
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Zero tailpipe emissions (clean air zones and ULEZ compliance)
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Grants for home EV chargers still active under government schemes
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Long-term cost savings even with new VED and BIK rates
So while electric car tax UK 2026 introduces new payment structures, the environmental and economic benefits of electric cars still outweigh the cost of ownership.
FAQs
How much VED will I pay for my electric car in 2026?
From April 1, 2026, you will pay £190 annually as the standard VED rate. Luxury EVs over £40,000 will attract an additional £390 surcharge per year for 5 years.
What is the BIK rate for electric cars in 2026?
The BIK rate for electric company cars in the 2026–27 tax year is 4%.
Are used EVs also affected by the new tax?
Yes. Used electric cars registered after April 1, 2017, will begin paying standard VED from 2026.
Is the EV purchase still worth it with these taxes?
Yes. EVs still offer significant fuel savings, zero emissions, and exemptions from certain urban charges despite the new taxes.
Will hybrid cars be taxed differently in 2026?
Plug-in hybrids (PHEVs) will continue to be taxed based on their CO₂ emissions and electric-only range, but may see adjusted VED rates in line with emissions brackets.
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