'Adjustment’ to VED car tax bills will see costs ‘double’ for many




The OBR explained: “In Autumn Budget 2024, the Government announced an adjustment to first-year VED rates for newly registered cars, increasing the charge to £110 for cars emitting less than 50g/km CO2, £130 for those emitting 51 to 75g/km CO2, and all other band rates doubling from April 2025.

“Rates for zero-emission cars will remain frozen at £10 until 2029-30.”

The update means the most polluting models emitting over 255g/km of CO2 will increase from £2,745 to £5,490.

Cars producing between 226 and 255g/km of CO2 will see charges increase from £2,340 to £4,680 as a result of the rise.

HM Revenue and Customs (HMRC) confirmed the update was intended to “widen the difference” between the three different fuel types.

The move could be intended to act as an incentive to motivate road users to make the transition to cleaner electric models.

HMRC said: “Vehicle Excise Duty first-year rates are paid for the first year of a car’s lifecycle, at the point of registration, and vary based on emissions.

“From 1 April 2025, the Vehicle Excise Duty first-year rates will be changed to widen the difference between zero-emission, hybrid and internal combustion engine cars.”

Motoring experts at Cinch urged road users to understand car tax rates in the first year is “different” to standard costs.

They reacted: “Your first year of car tax when buying a brand-new car is paid based on emissions, so it’s different than the standard rate.

“Electric cars registered after 1 April 2025 will now pay first-year road tax (a first for new EVs), and fuel-powered cars are also seeing a significant increase.”



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Posted: 2025-03-18 00:00:39

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