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Everything You Need to Know About the 2025 First-Year Road Tax Changes.

As of April 1, 2025, significant changes to the UK's Vehicle Excise Duty (VED), commonly known as road tax, will come into effect. These adjustments are designed to encourage the adoption of lower-emission and electric vehicles while ensuring that all drivers contribute fairly to road maintenance and environmental initiatives.

For many new car buyers, these changes may influence the overall cost of ownership, particularly for those considering high-emission petrol or diesel vehicles. Electric vehicles, which were previously exempt from road tax, will also see the introduction of new charges. Whether you're looking to purchase a petrol, diesel, hybrid, or fully electric BMW, understanding how these updates impact different models will help you make an informed decision.

In this blog, we break down the key changes to road tax rates, explain what they mean for new car buyers, and highlight how BMW’s diverse range of efficient and electrified models can help you navigate these updates.

Read on to learn more about what’s changing.

Wed 05 March 2025

Increased First-Year Rates for High-Emission Vehicles.

If you’re considering purchasing a new BMW with a combustion engine, it’s essential to understand these changes and how they may affect your overall ownership costs. The first-year tax rate is based on your vehicle’s CO₂ output, and the more emissions it produces, the higher the charge. Below, we outline the new rates and what they mean for prospective BMW owners.

Vehicles with higher CO₂ emissions will face substantial increases in their first-year VED rates:

  • Vehicles emitting over 255g/km CO₂: The first-year rate will rise from £2,745 to £5,490.

  • Vehicles emitting 226-255g/km CO₂: The first-year rate will increase from £2,365 to £4,730.

  • Vehicles emitting 191-225g/km CO₂: The first-year rate will go up from £1,945 to £3,890.

Introduction of VED for Electric Vehicles.​

For the first time, electric vehicles (EVs) will no longer be exempt from Vehicle Excise Duty. From April 2025, EV owners will need to pay road tax, marking a shift in how the government applies taxation across the automotive sector. This means that new BMW electric models, including the i4, iX, and i7, will be subject to a £10 first-year rate, bringing them in line with other ultra-low emission vehicles.

Following the first year, EVs will then be moved onto the standard annual rate of £190, aligning them with petrol and diesel cars. While this marks the end of the tax-free status for electric vehicles, they still benefit from significantly lower running costs, government incentives, and exemption from additional charges such as London’s ULEZ and congestion charge. If you're considering switching to electric, it's worth factoring in these upcoming changes alongside the long-term savings in fuel and maintenance.

Luxury Car Tax and Standard Rate Adjustments.

The ‘expensive car supplement,’ which currently applies to vehicles priced above £40,000, will also be extended to electric cars. Previously, EVs were exempt from this additional charge, but from 2025, they will be subject to the same rules as petrol and diesel models. This means that if you purchase an electric BMW over this threshold, you will need to pay an extra £410 per year for five years, on top of the standard VED rate.

The changes aim to create a more uniform tax structure across all vehicle types. These changes reflect the government’s approach to ensuring that all motorists contribute fairly to road maintenance and infrastructure, regardless of their chosen fuel type.

What this Means for BMW Owners.​

With the upcoming road tax changes, it’s important to consider how they may impact your choice of vehicle. While first-year costs for higher-emission models are increasing, BMW’s range includes a variety of efficient petrol, diesel, plug-in hybrid, and fully electric options to suit different needs and budgets. Electric BMWs will now be subject to standard road tax rates, but they continue to offer significant benefits in terms of running costs, sustainability, and potential incentives.

At Sandal BMW, we’re here to help you navigate these changes and find the perfect BMW for you. Whether you're considering a traditional engine, a hybrid, or making the switch to electric, our expert team can provide guidance on the most cost-effective and future-proof choices for your lifestyle. Visit us to explore our latest models and discover the right BMW for you.

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Below is a table outlining the average road tax costs for different vehicle bands, along with the corresponding cost increases. This breakdown highlights how the new tax adjustments will impact vehicles across various categories, from the most fuel-efficient models to higher-emission ones:

Band CO2 (g/Km) Range Avg. Road Tax (1st Year) 24/25 Avg. Road Tax (1st Year) 25/26 Avg. Difference Cost % increase
A 0 £0 £10 £10 ∞
B 1-50 £10 £110 £100 1000%
C 51-75 £30 £130 £100 333%
D 76-90 £135 £270 £135 100%
E 91-100 £175 £350 £175 100%
F 101-110 £195 £390 £195 100%
G 111-130 £220 £440 £220 100%
H 131-150 £270 £540 £270 100%
I 151-170 £680 £1,360 £680 100%
J 171-190 £1,095 £2,190 £1,095 100%
K 191-225 £1,650 £3,300 £1,650 100%
L 226-255 £2,340 £4,680 £2,340 100%
M 256+ £2,745 £5,490 £2,745 100%

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