Owners of petrol and diesel vehicles are set to face a ‘ten-fold’ car tax increase in 2025, dealing a significant blow to motorists. As part of extensive updates to Vehicle Excise Duty (VED) fees back in April, drivers of certain combustion vehicles were hit with substantial increases.
VED fees are determined based on vehicle emissions, meaning those that emit more pollution are typically charged the most. However, some of the least polluting combustion vehicles, emitting between just 1 and 50g/km of CO2, were subject to some of the sharpest rises.
Many plug-in hybrid models also felt the impact of the increase, which saw bills rise from a mere £10 to over £100. The RAC issued this warning ahead of the changes earlier this Spring, with road users now experiencing the effects.
The RAC explained: “The biggest news is the ten-fold increase in first-year car tax rates for cars emitting between 1-50g/km of CO2, which includes hybrids. These will increase from the current rate of £10 for petrol and diesel cars (or zero for hybrids) to £110. The vast majority of plug-in hybrid cars fall into this band. Rates for new cars emitting between 51-75g/km of CO2 will increase from £30 (or £20 for hybrids) to £135.”
Significant increases in first-year VED rates were a key component of Labour’s car tax updates over the Spring. In other instances, fees doubled, resulting in many road users being forced to pay thousands more to use the roads, reports the Express.
Vehicles producing over 255g/km of CO2 are now subject to £5,490 in first-year VED charges, representing a substantial jump from the previous annual rate of £2,745. Additionally, highly polluting cars generating between 226 and 255g/km will experience fee increases from £2,340 to £4,680.
Experts at Pete Barden outlined: “Starting from April 1, 2025, the UK’s Vehicle Excise Duty (VED) rates for new cars are set for a major overhaul, with significant increases in first-year rates for certain vehicle emissions categories.
“The government explains these changes as a way to “strengthen incentives” for choosing zero-emission and electric vehicles by expanding the cost differences between electric, hybrid, and internal combustion engine (ICE) vehicles.”
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