Motorists are bracing themselves for a sharp hike in vehicle expenses come April, with many facing significant rises in road tax. Changes coming into force on the 1st of April will see first-year road tax costs for most new vehicles potentially doubling, and those with the highest CO2-emitting models being the worst affected.
Owners of these vehicles might end up paying up to £2,745 more. Nyo Logan from BlackCircles explained: “Vehicle Excise Duty (VED) is a mandatory tax for vehicle owners that helps fund the maintenance of roads, research, and public transportation. The amount of this tax depends on the type of vehicle and the fuel it uses.”
He elaborated that road tax is commonly determined by the emissions output of the car, particularly for cars registered post-1st March 2001, where it’s calculated based on CO2 emissions and engine size.
“This is very important to take into consideration if you are looking to buy a car as the VED rates change year-on-year. To calculate the VED tax, the CO2 emissions will be broken down into different bands ranging from A (lowest) to M (highest). It is also based on the amount of CO2 emitted per kilometre (g/km),” reports Lancs Live.
He added: “Typically, the more emissions your vehicle produces, the more VED tax you’ll pay. However, factors including the age of your vehicle, the type of fuel it uses and the engine size will also affect the amount of tax.”
The cost of your vehicle could significantly impact the amount you shell out in vehicle excise duty (VED), with pricier models potentially attracting a ‘Luxury Car Tax’, warns an expert. He explained: “Many will be tempted to get the latest model of car or to treat themselves to a higher-end brand. However, a luxury car is likely to have a high road tax. Vehicles that are less than 6 years old and cost more than £40,000 are placed in the ‘Luxury Car Tax’ band. This is put in place from 1st April onwards and will cost an extra £410 per year in VED on top of the standard road tax rate.”
The expert also provided advice on checking potential road tax costs: “From April 1st of this year, cars emitting over 255g/km of CO2 will be required to pay an additional £2,745 to use the road. This will push first-year VED costs to a staggering £5,490 annually for some, marking a significant hit for drivers nationwide. With many people’s car tax increasing next month, it can be confusing about how much you will start paying.
“One of the easiest ways to check your vehicle’s tax is by using an online calculator, such as Gov.UK, and it is important to check so that you do not get a nasty surprise the next time you are billed.”
The upcoming changes from April 1st mean new car owners will see a hike in their VED for the first taxable year. According to research from car trader Dick Lovett, the latest regulations are set to double the road tax cost for all new cars emitting 76g/km or more of CO2.
The government currently defines Ultra Low Emission Vehicles (ULEVs) as cars that emit less than 75 grams of CO2 per kilometre (g/km). However, research by Dick Lovett has revealed that owners of ULEVs with a CO2 g/km range of 1-50 will face a shocking 1000% increase in their first-year road tax, leaping from £10 to £110.
Those with ULEVs emitting 51-75g/km of CO2 will see a 333% rise in their first-year road tax, from £30 to £130. Meanwhile, drivers of vehicles emitting more than 256g/km of CO2 will witness their average road tax double from £2,745 in 2024/25 to an eye-watering £5,490 in 2025/26.
See first-year road tax increases for all vehicles (by tax and CO2 bands) in cash and percentage terms below:
In the same budget, it was announced that the expensive car supplement will increase from £410 to £425 per year from 1st April 2025. This will now also apply to electric vehicles (EVs) over £40,000, which were previously exempt.
Currently, EVs avoid the luxury vehicle tax, but under the new rules, any EVs priced at £40,000 or more and registered after 1st April 2025 will also have to pay an additional £425 per year. Therefore, the drivers set to be most affected by these changes from 1st April are those with the highest CO2-producing vehicles costing £40,000 or more when new.
Those with vehicles also subject to the expensive car supplement will keep their total first-year tax costs (including the increased expensive car supplement) within three figures unless their vehicle produces more than 151 CO2 g/km, at which point the costs will soar from £680 to £1,360. An astonishing £680 increase is expected compared to the 24/25 tax year, with similar 100% increases for vehicles producing more CO2.
Luxury vehicle drivers, whose cars produce over 256 CO2 g/km, will see their first-year road tax costs skyrocket from £2,745 per year to a staggering £5,490 – a £2,745 hike compared to the 24/25 tax year.