Remember the Autumn Budget announcement back in October? While a lot of the stuff that Rachel Reeves (the Chancellor of the Exchequer) announced has already come into place, there are several measures that are still yet to be implemented. Most of them are due to be set in motion in just over a month’s time with the new tax year, and they include some huge changes to the tax you pay on your car.
It’ll be a particular shock to the system for electric vehicle owners, who are being charged after years of smug tax-free driving. But the changes affect all drivers to some degree, so pay attention.
The biggest shake-up is that Vehicle Excise Duty (VED) now applies to electric, zero and nil-rate low emission vehicles for the first time. A fee will be charged for both new and existing vehicles. On top of that, first-year road tax is set to at least double for most emissions bands. Cars registered from April 1 2025 that leak anything from 1-75g of CO2 per km will face an extra £100 whacked onto their first-year tax rate.
The new tax rates come into place from April 1 2025. Here’s a breakdown by vehicle.
Full list of new car tax charges for 2025
- Electric, zero or low-emission cars registered on or after April 1 2025: Owners will pay the lowest first-year tax rate of £10 until 2029-30 and £195 from the second tax payment onwards.
- Electric, zero or low-emission cars registered between April 1 2017 and March 31 2025: Charged standard rate of £195.
- Electric, zero or low-emission cars registered between March 1 2001 and March 31 2017: No longer exempt from VED. Owners will now pay the first band rate of £20 a year.
- Hybrid and alternatively fuelled vehicles (AFVs): The £10 annual discount for hybrid and AFVs has been ditched. For vehicles registered before April 1 2017, you’ll be charged according to its CO2 emissions. For those registered after that point, owners will pay the standard rate of £195.
- Electric vans: Will be charged the same road tax as diesel and petrol light goods vehicles, which is £355 a year.
- Electric motorcycles: Will transition to annual rate for smallest engine size.
- Luxury electric cars (expensive car supplement): Any new electric or zero-emission vehicles registered on or after April 1 2025 and costing more than £40,000 will be charged the standard rate plus the expensive car supplement of £425 from the second to sixth year the car is on the road.
For other types of vehicles, the tax increase depends on your CO2 emissions. For example, any cars registered between 2001 and 2017 that emit 101-120g/km will see no change in rates, but those that emit 121-150g/km will see a £5 increase, 151-200g/km will get a £10 increase, 201-225g/km will be charged an extra £15 and 226+g/km are being charged £25 more per year.
Got all that? You can see find an even more detailed breakdown over on the government website here.
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