Drivers could face forking out up to £5,400 next year as new car tax hikes confirmed
Under new plans revealed by the Labour government drivers will pay more than £5,000 a year in a massive car tax increase.
Chancellor of the Exchequer, Rachel Reeves, unveiled the first Budget from a Labour government in 15 years when she stood in front of the despatch box on Wednesday (30 October).
Announcing a raft of financial changes that will impact people and businesses across the United Kingdom, among the new policies introduced was a first of its kind vaping tax that will cost you a lot more if you're in to the past time.
Advert
Farmers also lost out, with the likes of Jeremy Clarkson stung with a bill in the millions of pounds when it comes to passing on Diddly Squat Farm.
Away from the vapes and agriculture was a move to change how car tax works. Officially known as Vehicle Excise Duty, or VED, it is something you have to pay if you have a car, van or motorbike.
From 1 April, 2025, car tax will increase in line with inflation, Reeves confirmed, with paying car tax a legal requirement for any vehicle registered on the roads of the UK.
How much car tax you pay depends on how green your motor is. The worse the carbon dioxide (CO2) emissions, the more you will have to fork out. When a car is first registered, you have to pay a full year's car tax up front, with the rate then lowering for the year's after this.
Vehicles that emit between one and 50 grams of CO2 per kilometre (this includes hybrid vehicles) will increase from £10 to £110 for the 2025/26 year for their first year on the roads.
Similar hikes will be brought in for cars that emit 51 to 75 grams of CO2 per kilometre with the amount increasing from £30 to £130.
But the largest price increase will be slapped on those who have bought vehicles emitting 76 grams, or more, of CO2 per kilometre.
On these cars, vans, and motorbikes, the Government confirmed that rates will 'double from their current level for 2025/26.
For those with cars up to 90 grams of CO2 per kilometre, you'll pay £270 instead of £135. And those for with the most guzzling of petrol and diesel cars - we're talking more than 255 grams of CO2 per kilometre - it will increase from £2,745 to £5,490.
Cars included in these banding include, but are not limited to:
- The Lamborghini Aventador
- Bentley Continental GT Supersports
- Maserati GranTurismo
- Ferrari GTC Lusso
- Bentley Mulsanne
- Aston Martin Vantage
- Rolls Royce Dawn
Cars with the lowest fees include:
- MINI Countryman Plugin
- Hybrid Nissan Qashqai
- Peugeot 108
- VW Golf
- Lexus CT200H
- Citroen C4
- Vauxhall Astra
- Ford Fiesta
- Ford Focus
- Alfa Romeo Giulietta
- Kia Picanto
- Renault Twingo
- Renault Clio
- Hyundai i30
On the cost increase, the government says: "The government will change the VED First Year Rates for new cars registered on or after 1 April 2025 to strengthen incentives to purchase zero emission and electric cars, by widening the differentials between zero emission, hybrid and internal combustion engine (ICE) cars."
Tom Earnshaw