Vehicle excise duty (VED) rates are increasing significantly from 1 April 2025, affecting both new and existing car owners across the UK. Here's what you need to know about these important changes.

Key Changes for New Cars:

• First-year road tax rates will double for vehicles with emissions over 75g/km
• High-emission vehicles (over 255g/km CO2) face the steepest increases, with some tax bills rising from £2,745 to £5,490
• The government expects to raise £400m next year and £1.7bn by decade's end

Electric Vehicle (EV) Impact:

• New EVs will now incur a £10 first-year rate
• Second-year onwards: standard rate of £195 applies
• EVs over £40,000 face the expensive car supplement (ECS) between years 2-6
• Government considering raising ECS threshold for EVs to maintain affordability

Changes for Existing Vehicles (2001-2017):

• Diesel cars: Average increase of £1,114
• Petrol cars: Average increase of £503
• Hybrids: Additional £135 to £327 depending on model

The tax increases are part of the government's strategy to encourage zero-emission vehicle adoption by making conventional fuel vehicles more expensive to own. These changes were announced by Chancellor Rachel Reeves during the previous Autumn Budget.

To minimize tax impact, consider:

• Choosing lower emission vehicles
• Exploring EVs under £40,000 to avoid the ECS
• Timing your vehicle purchase if planning to buy before April 1st
• Researching specific tax bands for your preferred vehicle model

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