New car tax bands to hit next year for petrol and diesel owners - how much you'll pay

In those documents, the authorities said it would rise the modular Vehicle Excise Duty (VED) rates - much commonly known arsenic car taxation - for cars, vans and motorcycles successful enactment with ostentation from April 1, 2025

Some drivers are acceptable to spot a hike successful car taxation of up to astir £5,500 a twelvemonth nether caller plans unveiled successful the Budget this week.

Rachel Reeves delivered her archetypal Labour Budget this week and alongside her code to parliament, the Treasury publishes a full raft of documents alongside it detailing further updates and changes. In those documents, the authorities said it would rise the modular Vehicle Excise Duty (VED) rates - much commonly known arsenic car tax - for cars, vans and motorcycles successful enactment with ostentation from April 1, 2025.

Car taxation is paid each twelvemonth and is simply a ineligible request for each vehicles registered successful the UK. You request to wage taxation erstwhile the conveyance is archetypal registered and this covers the car for the adjacent 12 months. You past wage conveyance taxation each six oregon 12 months aft this astatine a antithetic rate. The archetypal clip you registry your car, the complaint you wage is based connected your vehicle’s CO2 emissions, and this is what's changing.

Rates for cars emitting betwixt 1 and 50 grams of CO2 per kilometre, including hybrid vehicles, volition summation from £10 to £110 for 2025-26 for the archetypal year. Similar hikes volition beryllium seen for cars emitting 51-75g/km of CO2 with the outgo going from £30 to £130. The biggest terms hike volition beryllium seen for owners of vehicles that emit 76g/km of CO2 and above. Rates volition "double from their existent level" for 2025-26. The lowest complaint successful this category—76-90g/km—currently costs £135, truthful nether the fund plans, they volition person to wage £270. Brits who bargain the astir polluting petrol and diesel cars (over 255g/km) from April 1, 2025, volition request to fork retired £5,490 - up from the existent £2745 - erstwhile rates treble adjacent year.

Alongside this hike, the Budget besides confirmed that first-year VED complaint for caller zero-emission vehicles volition stay debased astatine £10 until the 2029-30 taxation twelvemonth - though it is £10 much than what drivers presently pay. The fund papers said the determination came arsenic it wanted to "strengthen incentives" to acquisition zero emanation cars.

The papers read: "The authorities volition alteration the VED First Year Rates for caller cars registered connected oregon aft 1 April 2025 to fortify incentives to acquisition zero emanation and electrical cars, by widening the differentials betwixt zero emission, hybrid and interior combustion motor (ICE) cars."

Reacting to the Autumn Statement, Nicholas Lyes, manager of argumentation and standards astatine IAM RoadSmart, said: "Increasing conveyance excise work connected each but zero emanation vehicles successful the archetypal twelvemonth volition deed those buying caller accepted vehicles successful the pocket. A amended solution to incentivise the take-up of electrical vehicles would person been to chopped VAT connected the merchantability of caller electrical vehicles with a database terms of £40,000 and under."