Following the Chancellor’s announcements in the UK Autumn Budget 2025, there has been a lot of noise around electric vehicles (EVs). And while much of the public debate has focused on a single issue, several significant positives for EV drivers and businesses have gone largely unnoticed.
Key Wins for EV Drivers
- Electric Car Grant Extended, helping to make EVs more affordable for consumers.
- Expensive Car Supplement Threshold Increased, from £40,000 to £50,000 for EVs, saving drivers of EVs priced over £40k £425 per year for the first five years.
- Government review into Public Charging Costs
- Continued Investment in Charging Infrastructure, including:Local Authority Chargepoint Capability funding and Cross-pavement charging support.
Business Benefits
- Eased tax increases on plug-in hybrids (PHEVs)
- Extension of the 100% first-year allowance for EVs and charge points
- No changes to EV Salary Sacrifice Schemes, and associated tax savings.
Despite the positive impact of many of the above announcements, these measures have received minimal media coverage. Most headlines have centred on the proposed 3p-a-mile Electric Vehicle Excise Duty (eVED), set to begin in 2028. But the real question is:
How will the new eVED compare to rising fuel duty and other motoring taxes by 2028?
For comparison, we’ve chosen the Volkswagen ID.4 and the Volkswagen Tiguan, as they are similar in size and the ID.4 is frequently positioned as the Tiguan’s electric alternative.
In the UK, the average annual mileage is 7,100, but we’ve based our comparison on 10,000 miles, as this reflects the mileage used in many Lease Electric customer leases.
What taxes are we paying now?
The table below shows estimate taxes for the VW ID.4 and Tiguan ranges, in 2025/26.
| Vehicle | Fuel Duty | Vehicle Excise Duty (VED) Year 1 | Expensive Car Supplement | Total Annual Tax |
|---|---|---|---|---|
| Electric Volkswagen ID.4 Pro, Black Edition |
£0 | £10 | £425 | £435 |
| Plug-in Hybrid (PHEV) Tiguan R Line 1.5 TSI e-Hybrid 62 mile Electric range 172.3mpg 37 g/km |
£139.68 | £110 | £425 | £674.68 |
| Petrol Tiguan R Line 1.5 eTSI 45.6mpg 141 g/km CO2 |
£527.81 | £540 | £425 | £1,492.81 |
| Diesel Tiguan R Line 2.0 TDI 50.9mpg 146 g/km |
£472.85 | £540 | £425 | £1,437.85 |
Benefit-in-Kind
Monthly BIK for employees with company cars,or utlising EV Salary Sacrifice in tax year 2025/2026.
| Vehicle | BIK % | 20% Tax Payer | 40% Tax Payer |
|---|---|---|---|
| Electric Volkswagen ID.4 Pro, Black Edition |
3% | £23.18 | £46.36 |
| Plug-in Hybrid (PHEV) Tiguan R Line 1.5 TSI e-Hybrid 62 mile Electric range 172.3mpg 37 g/km |
9% | £68.65 | £137.30 |
| Petrol Tiguan R Line 1.5 eTSI 45.6mpg 141 g/km CO2 |
34% | £238.77 | £477.53 |
| Diesel Tiguan R Line 2.0 TDI 50.9mpg 146 g/km |
35% | £252.79 | £505.58 |
For more information about Benefit-in-Kind, use our BIK table.
What taxes will we pay in 2028?
Calculations are based on the proposed 3p-per-mile eVED and the anticipated 57.95p-per-litre fuel duty, and current VED and Expensive Car Supplement charges (£425 per year, for the first 5 years) , excluding any future increases or inflation before they take effect in 2028.
The table below shows estimated 2028 taxes for the VW ID.4 and Tiguan ranges, assuming first-year VED applies.
| Vehicle | Mileage Based Charge (eVED) | Fuel Duty | Vehicle Excise Duty (VED) Year 1 | Expensive Car Supplement | Total Annual Tax |
|---|---|---|---|---|---|
| Electric Volkswagen ID.4 Pro, Black Edition |
£300 | £0 | £10 | £0 | £310 |
| Plug-in Hybrid (PHEV) Tiguan R Line 1.5 TSI e-Hybrid 62 mile Electric range 172.3mpg 37 g/km |
£150 | £153.14 | £110 | £425 | £838 |
| Petrol Tiguan R Line 1.5 eTSI 45.6mpg 141 g/km CO2 |
£0 | £577.65 | £540 | £425 | £1,543 |
| Diesel Tiguan R Line 2.0 TDI 50.9mpg 146 g/km |
£0 | £517.50 | £540 | £425 | £1,483 |
Benefit-in-Kind
Monthly BIK for employees with company cars,or utlising EV Salary Sacrifice in tax year 2028/2029.
| Vehicle | BIK % | 20% Tax Payer | 40% Tax Payer |
|---|---|---|---|
| Electric Volkswagen ID.4 Pro, Black Edition |
7% | £56.06 | £112.13 |
| Plug-in Hybrid (PHEV) Tiguan R Line 1.5 TSI e-Hybrid 62 mile Electric range 172.3mpg 37 g/km |
18% | £137.30 | £274.59 |
| Petrol Tiguan R Line 1.5 eTSI 45.6mpg 141 g/km CO2 |
37% | £259.83 | £519.67 |
| Diesel Tiguan R Line 2.0 TDI 50.9mpg 146 g/km |
38% | £274.46 | £48.91 |
For more information about Benefit-in-Kind, use our BIK table.
How do second year VED rates impact what we pay?
This table provides estimated annual taxes for vehicles in their second registration year, when the Standard Vehicle Excise Duty of £195 applies to all vehicle types, including EVs.
| Vehicle | Mileage Based Charge (eVED) | Fuel Duty | Vehicle Excise Duty (VED) Year 2 | Expensive Car Supplement | Total Annual Tax |
|---|---|---|---|---|---|
| Electric Volkswagen ID.4 Pro, Black Edition |
£300 | £0 | £195 | £0 | £495 |
| Plug-in Hybrid (PHEV) Tiguan R Line 1.5 TSI e-Hybrid 62 mile Electric range 172.3mpg 37 g/km |
£150 | £153.14 | £195 | £425 | £923 |
| Petrol Tiguan R Line 1.5 eTSI 45.6mpg 141 g/km CO2 |
£0 | £577.65 | £195 | £425 | £1,198 |
| Diesel Tiguan R Line 2.0 TDI 50.9mpg 146 g/km |
£0 | £517.50 | £195 | £425 | £1,138 |
Sources