2025 EV Road Tax Changes: A Complete Guide for PCO Drivers
Fully electric vehicles were previously exempt from road tax. However, from 1 April 2025, these exemptions have been removed, and everyone who drives an EV in the UK must pay road tax, also known as Vehicle Excise Duty (VED).
It is important for the private hire driver to understand how this tax works to stay on the road and keep earning.
In this article, we will provide an overview of the latest road tax changes of EVs and their impact on PCO drivers in London
Article Highlights
This guide covers:
- New tax rules for EVs
- How to pay the EV road tax
- Effects of EV road tax on PCO drivers
- Tips to keep costs manageable
Kia eNiro
£125/week
Kia Niro 2
£260/week
Mercedes Benz EQE
£325/week
Mercedes E300 2025
£375/week
Mercedes-Benz E300e
£320/week
Toyota Prius
£200/week
Important Information for Private Hire Drivers
- The road tax on EVs that were registered between 1 April 2017 and 31 March 2025 is £195 per year.
- If your electric vehicle was registered after 1 April 2025, you will only pay £10 road tax in the first year. However, the amount will go back to the standard £195 in the following years.
- For EVs that cost £40,000 or above, the road tax will be £10 for the first year, £620 for the next five years, and £195 in the following years.
- The £10 discount for hybrid vehicles has also been removed. On any hybrid registered after 1 April 2017, you will have to pay the standard £195 per year.
- EVs registered between 1 March 2001 and 31 March 2017 will qualify for Band B rate, which is £20 per year.
How to Pay EV Road Tax?
If you are a Fleeto customer, you don’t need to pay the electric car road tax. We take care of it for you. However, if you drive independently, then follow the steps below.
Choose a Payment Method
There are three methods to choose from:
- Online: Visit Gov.uk website and follow the instructions.
- Phone: Call 0300 123 4321 to pay over the phone. Charges apply.
- Post Office: Visit a post office that deals with road tax. Bring the required documents as well.
Documents Required
- Your vehicle logbook (V5C).
- A valid MOT certificate (only required for cars over three years old).
- Insurance certificate.
- A green ‘new keeper’ slip if you have just bought the vehicle.
Set Up a Payment Plan
You can choose to pay:
- Annually
- Every six months
- Monthly
The payments can be made in cash or via credit/debit card. There is 5% surcharge on monthly and biannual payments, but no surcharge on annual payments.
You can also set up Direct Debit for automatic deductions.
Effects of EV Road Tax on Private Hire Drivers
The changes in EV road tax will affect PCO drivers in many ways, including:
Increased Operating Costs
PCO drivers, who previously enjoyed zero road tax on EVs will now have to pay from £195 to £620 in road tax per year. This brings an added financial burden and can eat into your profits.
Low Resale Value
Professional drivers who bought EVs to avoid annual costs will now have to pay the same £195 VED as new owners. This may affect the resale value of EVs in the second-hand market, especially those registered between 2017 and 2025.
Reduced Confidence in EV Perks Offered by the Government
With VED exemption ending, many drivers are concerned that other EV perks like ULEZ and congestion charge exemptions may disappear as well. Let’s see what the future holds.
Tips to Keep Costs Under Control
While you can’t avoid the road tax anymore, there are certain ways to bring your running costs down, such as:
Choose an EV Below £40,000
EVs that cost below £40,000 only have to pay £195 per year, helping you avoid paying the extra £425. That’s £2,125 saved over 5 years.
Use All-Inclusive Hire or Rent to Buy Plans
Most PCO car hire and rent to buy plans include road tax in affordable weekly payments. This spreads the cost over your plan’s duration.
Stay Informed on Policy Changes
Regularly check official sources like GOV.UK Vehicle Tax Guidance to stay updated on tax rates and regulations.
Start Earning Today.
How Can Fleeto Help?
When you get a car with Fleeto, the road tax is covered in your weekly charge. This means no hassle of visiting the post office or arranging documents. Just one flat charge to keep things simple
Frequently Asked Questions
Why is the government applying road tax on EVs?
Due to the soaring demand for EVs, the number of non-electric vehicles is decreasing, leading to a loss in tax revenue. The government is applying tax on EVs to recover these losses.
How much is the road tax on hybrid cars?
Hybrid cars will also pay £195/year in road tax.
How much road tax will I pay on my EV in 2025?
If your EV was registered after 1 April 2025, you will only pay £10 VED in 2025.
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