6 commercial vehicle tax changes for 2025

There are a number of commercial vehicle tax changes in 2025 that business owners need to be aware of, including changes to what’s actually classed as “commercial”. 

So if you use lorries or vans to transport goods or provide your services, read on to explore the changes that might impact your costs. There are also changes that will impact you if your employees use company cars. 

1. Vehicle Excise Duty
2. Fuel duty
3. Electric vehicle tax
4. New classification for double-cab trucks
5. Vehicle advisory fuel rates
6. Congestion charges for EVs

Vehicle excise duty increases

All brand-new vehicles are subject to paying a higher rate of tax (known as vehicle excise duty or ‘VED’) for the first taxable year of owning the car. The rate depends on your vehicle’s CO2 emissions. Vehicle excise duty rates are increasing for all types of vehicles from April 2025.

See the table below for a full list of the VED increases. 

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	0%
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%

Read more about Vehicle Excise Duty and how it impacts business drivers.

Paying tax on electric vehicles

If you use an electric van as a commercial vehicle, it’s important to note that all owners of all electric vehicles (EVs) will need to pay the standard rate of road tax after 1 April 2025. Until now, EVs were exempt from road tax. 

Plus if you buy an EV after April 2025, you’ll also have to pay a first-year rate of £10 and an Expensive Car supplement of £410 if the list price is more than £40,000. 

Fuel duty remains frozen 

The fuel duty rate (currently 52.95 pence per litre) is staying frozen until March 2026. While there’s still plenty of time until then, businesses with a fleet of commercial vehicles will want to watch out for news of the freeze potentially ending. 

New classification for double-cab trucks

Double cab pick-up trucks with a payload of at least one metric tonne won’t be classified as vans for benefit-in-kind (BIK) or capital allowance purposes from 6 April 2025. Instead, they’ll be classified as cars – meaning you could see your BIK payments go up dramatically. 

These vehicles will now be taxed alongside some of the most polluting petrol and diesel cars, which generally attract a rate of more than 35 per cent.

However, there’s a way to hold off this increase. If you purchase a new double cab pick-up truck before the beginning of April, they’ll keep their commercial vehicle classification until the earliest date between disposal, lease expiry, or April 6 2029.

Vehicle advisory fuel rates 

Advisory fuel rates were increased from 1 March 2025, meaning you’re likely to see costs increase if your business uses company cars. 

The cost per mile has increased for petrol cars with an engine size of up to 1,400cc (from 14p to 15p) and diesel cars with an engine size of up to 1,600cc. 

Congestion Charges for EVs

It’s also worth being aware of changes to the Congestion Charge. From December 2025, even EVs and hydrogen fuel cell vehicles will need to pay the Congestion Charge of £15. If you use an electric van for London-based work, you should factor this into your budgeting.