At-a-glance for fleets
- New zero-emission cars (registered ≥ 1 Apr 2025): £10 in year 1, then £195 standard rate from year 2. (gov.uk)
- Expensive Car Supplement (ECS): +£425/year in years 2–6 if list price > £40,000 (applies to EVs registered ≥ 1 Apr 2025). Total in ECS years = £620 (£195+£425). (assets.publishing.service.gov.uk), (gov.uk)
- EVs registered 1 Apr 2017 – 31 Mar 2025 (existing fleet): pay £195 from renewal in 2025/26. (researchbriefings.files.parliament.uk)
- Light goods vehicles (≤ 3,500 kg, incl. electric vans): £345 per 12 months. (assets.publishing.service.gov.uk)
- Zero-emission motorcycles/tricycles: £26 per 12 months. (assets.publishing.service.gov.uk)
- Direct Debit possible (monthly/6m/12m) per DVLA rate card. (assets.publishing.service.gov.uk)
Why this matters to fleet budgets
From 1 April 2025, EVs enter the standard VED regime: £10 first year, £195 thereafter. EVs over £40k list (first registered ≥ 1 Apr 2025) also incur the ECS for five years (years 2–6). (gov.uk), (assets.publishing.service.gov.uk)
ECS exposure by replacement cycle
| Replacement cycle | ECS years hit | ECS payments (per car) | Incremental VED vs under £40k |
|---|---|---|---|
| 24 months | Year 2 | 1 × £425 | £425 |
| 36 months | Years 2–3 | 2 × £425 | £850 |
| 48 months | Years 2–4 | 3 × £425 | £1,275 |
| 60 months | Years 2–5 | 4 × £425 | £1,700 |
Calculation uses ECS £425 in years 2–6; first year always £10; standard rate £195 applies to all EVs from year 2. (assets.publishing.service.gov.uk), (gov.uk)
Fleet-scale example
100 EVs > £40k, 36-month cycle → 2 ECS years per vehicle. Incremental ECS over cycle = 100 × (2 × £425) = £85,000 vs the same cars specced under £40k (which avoid ECS). (assets.publishing.service.gov.uk)
Procurement playbook (opinion)
- Guard the £40k threshold. Treat the manufacturer list price at first registration as the trigger; options can push you over the line—spec packs matter more than dealer discounts. (Industry guidance aligns that “list price includes options”; validate against OEM price lists for each trim.) (Auto Express)
- Cycle design = tax design. If you cannot stay under £40k, a 36-month policy concentrates ECS to 2 years (vs 3–4 years on longer cycles).
- Segmentation by trim. Create A/B trim policies: A-trim under £40k (no ECS) for general users; B-trim for duty-cycle-critical roles (accept ECS, justify via TCO).
- Lease commercials. On contract hire, VED is usually embedded in rentals—ask for a line-item (standard vs ECS) to expose savings from sub-£40k specs.
- Vans ≠ cars. Budget £345/van/year for N1 electric LCVs (≤ 3,500 kg) and use DD to smooth cash flow. (assets.publishing.service.gov.uk)
What changed
Who is affected
- Company cars and grey fleet registered in Great Britain; existing EVs (2017–2025) migrate to £195 at renewal; pre-2017 EVs pay £20. (gov.uk), (researchbriefings.files.parliament.uk)
- LCVs (≤ 3,500 kg) incl. electric vans fall under DVLA’s LCV table (£345). (assets.publishing.service.gov.uk)
Worked scenarios
| Scenario | Year 1 | Years 2–6 (where applicable) | Year 7+ |
|---|---|---|---|
| New EV, list £42,000, registered 2 Apr 2025 | £10 | £620/yr (ECS years only) → then £195/yr | £195 |
| New EV, list £35,000, registered 5 Sep 2025 | £10 | £195/yr (no ECS) | £195 |
| EV registered in 2022 | — | £195/yr from 2025/26 renewal (no ECS) | £195 |
| Electric van (≤ 3,500 kg) | — | £345/yr | £345 |
Totals reflect DVLA V149 tables and ECS rules (years 2–6). Always check the DVLA rate card for the current tax year. (assets.publishing.service.gov.uk), (gov.uk)
Data you should capture per vehicle (opinion)
- First registration date (drives regime and ECS applicability).
- Manufacturer list price (RRP) at first registration incl. options. (Cross-check brochures / OEM data sheets.) (Auto Express)
- Tax class (car vs light goods ≤ 3,500 kg). (assets.publishing.service.gov.uk)
- Lease structure (who pays VED; DD cadence; line-item visibility).
- Planned retention (to count ECS years for > £40k).
How to verify your rate
- DVLA V149 (cars/MC/LCV) and V149/1 (goods/buses) — official rate cards for 2025/26. (assets.publishing.service.gov.uk)
- GOV.UK guidance: electric, zero and low emission vehicles (policy overview, ECS rule). (gov.uk)
- Commons Library briefing (policy summary and transition of older EVs). (researchbriefings.files.parliament.uk)
Tip (opinion): add VED/ECS as explicit rows in Fleet-Savings v2 so that WLC reflects trim choices crossing £40k.
FAQ (fleet-focused)
What do new EVs pay from 1 April 2025?
£10 in year 1, then £195 per year from year 2.
Does ECS apply to EVs?
Yes—if list price > £40k and first registered on/after 1 Apr 2025. ECS is £425/year in years 2–6 (total £620 in ECS years).
Do EVs registered before 1 Apr 2025 pay the supplement?
No. They pay the £195 standard rate from renewal in 2025/26; ECS does not apply to these vehicles.
What about electric vans?
Budget £345/van/year (≤ 3,500 kg LCV tax class).
On contract hire, who pays VED? (opinion)
Typically the lessor taxes the vehicle and passes the cost through the rental. Ask for a VED/ECS line-item to expose savings from sub-£40k specs.
Internal links
- AER (2025) — HMRC split (8p home / 14p public)
- Fleet-Savings v2 (include VED/ECS rows) → /tools/fleet-savings
Editor notes
- Amounts are 2025/26; re-check each April against V149 and GOV.UK guidance.
- For “list price incl. options”, align with OEM price lists and procurement docs; industry sources consistently interpret ECS on list price incl. options.