A staggering 59 cars from 24 brands, including popular manufacturers like Ford, BMW and Mercedes, are bracing for a hefty £2,745 car tax increase come April 2025.
This is due to significant changes in Vehicle Excise Duty (VED) rates announced in the Autumn Budget by Labour.
The first-year VED charges for petrol and diesel models will witness a considerable hike, with these hefty fees being shouldered by owners of brand-new vehicles before they transition to the standard rate. The fees will escalate on a sliding scale, with most of the higher tiers seeing their charges double from their current 2024 rates.
Models emitting over 255 g/km of CO2 are set for the highest £2,745 increase, impacting some of the most common vehicles on the road. This means that popular mid-market brands such as Ford and Toyota will have some models affected.
BMW, Mercedes and Audi models will also feel the pinch. Moreover, high-end vehicles will bear the brunt of the change, reports the Mirror.
Some Porsche, Lotus, Lamborghini, and McLaren models are set to face the new tax. So, why are first-year VED rates on the rise?
Well, back in late October, Chancellor Rachel Reeves announced that drivers of new petrol, diesel and hybrid vehicles would be hit with higher first-year tax rates.
The move aims to incentivise consumers to opt for electric vehicles and widen the gap between ‘higher polluting’ vehicles and EVs. The first-year tax figure is determined by considering the amount of carbon dioxide it emits.
Electric vehicle (EV) owners who’ve been exempt from Vehicle Excise Duty (VED) will face a new nominal £10 charge for the first year starting this April, though the Treasury has opted to hold this rate steady for now.
In a pronounced pivot, operators of petrol, diesel, and hybrid motors are set to endure escalated VED rates, with certain levies poised to double. As disclosed to Car Dealer Magazine by a Treasury spokesperson, come April 2025, the initial-year VED cost for a fresh Ford Puma is slated to soar from the present £220 up to £440.
On another note, aficionados of the Range Rover may soon confront a formidable £5,490 fee, considerably up from the existing £2,745 levy. Chancellor Rachel Reeves articulated in her Budget pronouncement to Parliament members: “To help drive the transition to electric vehicles the government is strengthening incentives to purchase EVs by widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars.”
She continued, “The government is also maintaining EV incentives in the Company Car Tax regime and extending 100% First Year Allowances for zero emission cars and EV charge points for a further year.”
The Budget documentation shed light on the specifics of VED first-year rates, which are applied upon registration and differ based on emissions. It elaborated: “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.”
Furthermore, a detailed list has been released, identifying new models with emissions surpassing 255 g/km.