Vehicle Excise Duty (VED)

Question 1

Government changes to VED

ald · Accepted Answer

The Government is making changes from 1st April 2025 to how Vehicle Excise Duty (VED) is charged. This was previously referred to as Road Tax or Road Fund License (RFL). Depending on your vehicle type and the value of your vehicle, these changes could result in an increase in cost of your VED and Expensive Car Supplement (ECS).

You can find further information about the changes [here](targetSelf:https://www.aldautomotive.co.uk/business-mobility/news/insights/ArticleID/6110/Vehicle-Excise-Duty-Changes-2025).

**Electric vehicles no longer exempt from Vehicle Excise Duty (VED)**

In the first year of registration, for vehicles registered from the 1st April 2025, cars will pay the lowest first year rate, currently £10, and vans will pay the standard rate, currently £345 for the tax year 2025/26

For all electric vehicles, registered before or after 1st April 2025, after the first year of registration, the standard rate will be charged on the vehicle’s registration anniversary. Currently, this is £195 for cars and £345 for vans for the 2025/26 tax year, and this increases annually in line with inflation

**Expensive Car Supplement (ECS)**

- This has been applied to petrol and diesel cars with a list price of £40,000 and over since 2017
- From 1st April 2025, all new electric cars, registered from 1st April 2025, will also attract the supplement, where the list price is £40,000 and over
- It is payable in years two to six and is in addition to the standard VED charge
- In the 2025/26 tax year, the ECS rate will be set at £425 per year, and increases annually in line with inflation
- It is not currently being applied to electric vans

**Increased VED rates for all cars with emissions over 1 gram/km**

- The rates for the first year of vehicle registration for these vehicles will increase as below:
- Increase by £100 for cars with 1 gram to 75 grams of CO2 per kilometre
- Double for cars with 76 grams or more of CO2per kilometre

**Hybrids - including Plug ins - tax benefits removed**

- The Government has cancelled the £10 discount on the standard rate for hybrid vehicles

Please contact us if you have any questions or require any further information. If you have a company car, you can reach out directly to your Account Manager. If you have a personal vehicle or do not have an Account Manager, you can call us on 03700 011 181 or email us at customerrelations@aldautomotive.com. Please have your vehicle registration number or account reference number to hand when you call, or include these details in your email.

Question 2

I'm a Blue Badge holder, can you apply my VED exemption?

ald · Accepted Answer

If you are a Blue Badge holder, you may be eligible for an exemption on your/your company vehicle’s Vehicle Excise Duty (VED). This was previously referred to as Road Tax or Road Fund License (RFL). To qualify for this exemption, you must be the main driver of your/your company vehicle.

If you have one of the below contract types, VED is included in your monthly payments:

- Personal Contract Hire
- Business Contract Hire
- Personal Contract Purchase with Maintenance
- Contract Purchase with Maintenance

As we are the registered keeper of your/your company vehicle, we renew the VED. Only the registered keeper can apply for the VED, and we can apply for the VED exemption on your behalf.
 If you’d like us to apply for the exemption on your behalf, please email maintenance.admin@aldautomotive.com, with:

- The vehicle registration number
- Your account reference number
- A PDF copy of your Disability Living Allowance (DLA) or Personal Independence Payment (PIP) ‘Certificate of Entitlement’
- A clear photo of both sides of your Blue Badge in PDF format

Once confirmation of your exemption has been confirmed by the DVLA and processed by us, we will arrange any applicable RFL refunds due on your account.

If you have any questions or need any further information you can call us on 03700 011 181 or email us at customerrelations@aldautomotive.com. Please have your vehicle registration number or account reference number to hand when you call or include these details in your email.

Question 3

Is Vehicle Excise Duty included in my agreement?

ald · Accepted Answer

Vehicle Excise Duty (VED), was previously referred to as Road Fund License (RFL) and is commonly referred to as Road Tax. Please refer to the relevant ‘Statutory Obligations’ or ‘Ownership clause’ in your agreement, or contact us to check if VED is included by calling us on 03700 011 181 or emailing us at customerrelations@aldautomotive.com. Please include either your account reference number or vehicle registration number in your email or have these details to hand when you call.

**How is VED managed if it is included in my agreement?**

If it’s included in your agreement, it will usually be managed by us online. You can check on its status at any time [via the GOV.UK website](targetSelf:https://www.gov.uk/check-vehicle-tax). It can take a few days for a vehicle’s tax status to be updated on the government’s ‘Check Vehicle Tax’ website.

**Statutory Off Road Notification (SORN)**

We are not able to allow customers to declare their vehicle as SORN under any circumstances. If you need us to declare your vehicle as SORN please contact us to discuss this by calling us on 03700 011 181 or emailing us at customerrelations@aldautomotive.com. Please include either your account reference or vehicle registration number in your email or have these details to hand when you call. For information on how to find your account reference number, please click here [link to HelpHub article ‘Where can I find my account reference number?’

Question 4

Why is VAT included on my VED invoice?

ald · Accepted Answer

If you have one of the contract types listed below, Vehicle Excise Duty (VED), previously referred to as Road Tax or Road Fund License (RFL), is included in your/your company’s monthly vehicle payments

- Personal Contract Hire
- Business Contract Hire
- Personal Contract Purchase with Maintenance
- Contract Purchase with Maintenance

The VED rate included in your monthly payments is based on the rate set when your vehicle was initially quoted. If the Government increases the VED rate during the subsequent years of your agreement, we’ll pass the difference on to you when we renew the VED. As we are the registered keeper of your/your company vehicle, we renew the VED for your vehicle, as only the registered keeper can apply for the VED.

You’ll receive a ‘Vehicle Excise Duty (VED) Recharge’ invoice for the amount the VED has increased by, which will include Value Added Tax (VAT). This invoice is for the increased cost of your agreement with us, meaning VAT is chargeable. If you would like to discuss this with us, please contact us customerrelations@aldautomotive.com or call us on 03700 011 181. Please include either your vehicle registration number or account reference number in your email or have these details to hand when you call.

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