What new taxes, rule changes and charges do motorists face in 2025?
Drivers across the UK are being urged to prepare for a wave of motoring changes taking effect this year, with electric vehicle (EV) owners set to bear the brunt of financial adjustments.
According to LeaseLoco.com, key changes include the removal of exemptions and incentives that have previously made EV ownership more appealing. From April 2025, EVs will no longer be exempt from Vehicle Excise Duty (VED). Newly registered EVs will face a £10 VED charge in the first year, rising to £195 annually from year two. High-value EVs exceeding £40,000 will incur an additional £410 annual charge for five years.
Further pressure will come in December 2025, when the London Congestion Charge exemption ends. All vehicles, including EVs, will face the daily £15 charge to drive in central London, with the change taking full effect in January 2026.
Charging infrastructure regulations will also tighten. Providers must meet government standards for reliability and ease of use, or risk fines of up to £10,000 per non-compliant charger. While this is expected to improve service over time, short-term cost increases for EV users are possible.
For petrol and diesel drivers, relief comes in the form of an extended fuel duty freeze, confirmed in the Autumn Budget. Duty will remain at 52.95p per litre until at least 2026. The introduction of a ‘Fuel Finder’ scheme by the end of 2025 aims to further help drivers by enabling real-time fuel price comparisons.
Company car drivers will also feel the impact of rising Benefit-in-Kind (BiK) tax rates. Starting April 2025, BiK rates will increase by 1%, with EVs rising from 2% to 3%, and higher-emission vehicles facing even steeper climbs.
Additional changes include mandatory HGV safety permits in Greater London from May 2025, which aim to improve protection for vulnerable road users. Scotland will also implement a 20mph default speed limit in urban and residential areas, designed to enhance safety for pedestrians and cyclists.
The removal of financial perks for EV owners may signal a shift in government priorities, potentially slowing the pace of EV adoption. These developments mark a significant year for drivers as the motoring landscape continues to evolve.
John Wilmot, CEO of car leasing comparison site LeaseLoco.com, said: “These upcoming changes show a significant shift in how vehicle ownership is incentivised and regulated in the UK – particularly for electric vehicles.
“While many of the measures are aimed at improving infrastructure and safety, they also reflect a move towards equalising the playing field between EVs and traditional petrol or diesel vehicles.
“The removal of key EV financial perks, such as the Vehicle Excise Duty (VED) exemption and Congestion Charge discounts, will undoubtedly impact the cost effectiveness of owning or leasing an EV.
“For many drivers, these incentives were a major factor in the decision to transition to electric. So it’s possible that these changes could actually slow the momentum of EV adoption, particularly among drivers who were on the fence about making the switch.
“But on the positive side, the new reliability standards for EV charging infrastructure could address a long standing concern.
“For the leasing market, improved charging accessibility and ease of use may help offset some of the financial impacts and maintain interest in EVs as a viable option.
“Ultimately, these changes emphasise the need for both drivers and relevant motoring businesses to stay informed and adapt quickly.”
