April 2026 EV tax changes: what driving instructors with electric cars need to know
An ADI covering 30,000 miles a year in an electric tuition car paid no vehicle tax at all until April 2025. From April 2028 the same car will cost £1,100 a year in tax before a single insurance or charging bill. That is the direction of travel, and the April 2026 changes are one step on the way.
The good news for instructors is in the detail. The threshold for the Expensive Car Supplement on electric cars has gone up to £50,000, and a new electric car still qualifies for 100% first-year capital allowances. Here is what changed, what it costs, and what it means if you teach in an EV or are thinking about one.
April 2025: EVs started paying vehicle tax
From 1 April 2025, electric cars lost their exemption from Vehicle Excise Duty (VED). The government's policy paper set out the rules:
- A new electric car pays the lowest first-year rate, now £10.
- From the second year it pays the same standard rate as a petrol or diesel car.
- Electric cars registered between 1 April 2017 and 31 March 2025 moved straight onto the standard rate.
The standard rate for 2026-27 is £200 a year (£210 if you pay by 12 monthly Direct Debits). It was £195 in 2025-26.
April 2026: the £50,000 threshold for electric cars
The Expensive Car Supplement (ECS) is an extra charge on cars with a high list price. It is paid for five years, starting from the second time the car is taxed. For 2026-27 it is £440 a year, so a car that pays it costs £640 a year to tax.
The threshold depends on the fuel:
| Car | ECS applies if the list price is over |
|---|---|
| Petrol, diesel or hybrid | £40,000 |
| Electric, registered on or after 1 April 2025 | £50,000 |
| Electric, registered before 1 April 2025 | Never pays ECS |
The £50,000 figure is the April 2026 change. It also covers electric cars registered between 1 April 2025 and 31 March 2026, so a 2025 EV listed at £45,000 no longer pays the supplement.
If your EV was registered before 1 April 2025, you do not pay the supplement at all, whatever it cost. Your only change was going from £0 to the standard rate.
"List price" means the published price before the car was first registered, before any discount. GOV.UK says to check it with your dealer.
April 2028: 3p a mile
This is the change that matters most to instructors, because we drive a lot.
From 1 April 2028, Electric Vehicle Excise Duty (eVED) adds a mileage charge on top of VED:
- 3p a mile for battery electric cars
- 1.5p a mile for plug-in hybrids
The rate rises with CPI inflation from 2029-30. You will give an odometer reading and estimate your mileage for the year when you renew your vehicle tax, pay upfront or spread it over the year, and settle up against your actual mileage at the end. The DVLA will run it. Electric vans stay exempt.
The Treasury says 3p is half the fuel duty the average petrol or diesel driver pays per mile, and gives an example of £240 a year for 8,000 miles. An instructor's mileage is nothing like that:
| Annual mileage | eVED at 3p a mile |
|---|---|
| 15,000 | £450 |
| 20,000 | £600 |
| 30,000 | £900 |
What the car tax adds up to
At 30,000 miles a year and 2026-27 rates, from the car's second year:
| Before April 2028 | From April 2028 | |
|---|---|---|
| EV listed at £50,000 or less | £200 | £1,100 |
| EV listed over £50,000 (years 2 to 6) | £640 | £1,540 |
A petrol car pays the same £200 standard rate, plus fuel duty at the pump. On the Treasury's own comparison, the petrol driver pays roughly twice as much in fuel duty per mile as the EV driver will pay in eVED. So eVED narrows the tax gap between electric and petrol but does not close it.
What this table leaves out is the running cost that decides most of it: electricity against petrol. That depends on whether you charge at home and what tariff you are on, so do the sum with your own numbers.
Capital allowances: where EVs still win
The tax change most instructors miss is not VED at all. It is how the car's cost is relieved against your profits.
Sole traders can't use the mileage rate on a dual-control car. HMRC's simplified expenses rules exclude "dual control driving instructors' cars" from the flat mileage rate (55p a mile for the first 10,000 miles in 2026-27). So an ADI working from a dual-control car claims actual costs instead: fuel or electricity, insurance, repairs, VED and the rest, plus capital allowances on the car itself, all reduced for any private use.
New electric cars get 100% first-year allowances. If you buy a new, unused electric car before April 2027, you can deduct the full cost from that year's profits. That applies to sole traders and limited companies alike. A second-hand EV doesn't qualify and goes into the main rate pool instead.
Petrol cars are written down slowly. Most petrol cars emit more than 50g/km of CO2, which puts them in the special rate pool at 6% a year. Cars at 50g/km or less, including second-hand EVs, get the main rate, which fell from 18% to 14% in April 2026.
A worked example for a limited company with profits under £50,000, which pays Corporation Tax at the 19% small profits rate:
| Car bought for £35,000 | Year-one allowance | Year-one Corporation Tax saving (if profits cover it) |
|---|---|---|
| New electric car | £35,000 (100%) | £6,650 |
| Petrol car over 50g/km | £2,100 (6%) | £399 |
The petrol car gets the rest of its relief eventually, but over many years. The first-year allowance on new EVs ends for purchases from April 2027. If you are weighing up a new EV, that deadline is worth more to most instructors than anything in the VED table.
If you already teach in an EV
For most instructors in an electric car, nothing in April 2026 made things worse:
- Registered before April 2025: you pay £200 a year standard rate and no supplement.
- Registered from April 2025, listed at £50,000 or less: the supplement no longer applies to you.
- Listed over £50,000: you pay £640 a year until the car's sixth year of tax.
The bigger line for your budget is eVED from April 2028. At 30,000 miles that is £900 a year, so put it in your projections now if you plan to keep the car past spring 2028.
If you are choosing your next car
The questions that decide it:
- Can you charge at home? The fuel saving depends on it.
- Is the list price over £50,000? Staying under the line avoids £440 a year for five years.
- Can you buy new before April 2027? That keeps the 100% first-year allowance.
- How many miles do you do? eVED scales with mileage, and so do the fuel savings.
Our best cars for driving instructors guide compares the popular tuition cars on running costs. For the day-to-day records, Orbit's accounting tools log your vehicle costs and business mileage alongside lesson income, so the actual-costs claim is ready when your accountant or tax return needs it.
Disclaimer
This article is for general information and does not constitute tax, legal, or financial advice. UK tax rules change frequently and individual circumstances vary. Consult a qualified accountant, tax adviser, or HMRC directly for advice specific to your situation. Orbit (listed with HMRC as DrivePro) is built on HMRC's Making Tax Digital for Income Tax API and is completing HMRC's software recognition process; live submissions open once HMRC approves it. It does not provide personalised tax advice.