Motorists are expected to feel the impact of the major car tax changes which are set to be introduced in Britain tomorrow.
From April 1, new car tax rates will come into effect meaning drivers will face significant price increases. There will be a new standard road tax rate, new taxes for electric vehicles (EVs), tax rises for low-emission vehicles and doubling first-year rates for higher polluting new cars.
Currently EV owners do not pay road tax, however, following the new changes they will need to start paying a higher band of vehicle excise duty (VED).
This will be £10 in the first year for cars registered after this date. It remains significantly below the standard annual rates for other vehicles, at £190 for cars, £335 for vans and £25 for motorcycles.
From tomorrow (April 1), those with electric vehicles worth over £40,000 will also need to begin paying the Expensive Car Supplement which other car types have been subject to since 2017, reports Birmingham Live.
Matt Walters, Head of Consultancy Services and Customer Value, at Ayvens said: “New cars bear the brunt of tax changes. This has left fleets and private motorists in the dark about a tax policy that could cost electric vehicle drivers an additional £1,300 over a four-year lease contract.”
Walters added: “Despite growing pressure on fleets to reduce CO2 emissions, operators are facing challenges with reduced payload and range, charging networks with spaces designed for cars, and additional administrative burdens for the largest vans.”
Richard Evans, webuyanycar’s head of technical services, said: “Despite the changes and increases across the board, EV drivers will still have the most favourable road tax rates from April 2025.
“The £10 showroom tax for new EV buyers is small compared to the rates for low and higher-emission models. Once the changes take effect, owners of EVs first registered before April 2017 will have the cheapest annual road tax rate of all at just £20.
“This makes older EVs an attractive option for budget used car buyers looking to save on running costs. Meanwhile, road tax rates for cars producing over 76 g/km of CO2 are set to double. So, if you buy a new luxury or performance car in the highest emissions band from April 1, you’ll face a £5,490 first-year road tax bill. Therefore, if ownership costs are a concern, it pays to opt for a greener motor.”
The following car tax changes will come into effect from April 1
New standard road tax rate
The standard annual road tax rate will increase from £190 to £195. This new rate will apply to all cars first registered between April, 1 2017 and March, 31 2025.
New taxes for EVs
Tax rises for low-emission vehicles
- First-year road tax for low-emission vehicles producing between 1 and 50 g/km of CO2 will rise to £110. Until the change comes into effect, hybrid cars in this band (which includes most plug-in hybrids) pay no road tax in the first year, whilst petrol and diesel cars in the same band paid £10.
- First-year road tax for new cars emitting 51-75 g/km will rise to £135. The previous rate for cars in this band was £20 for hybrids and £30 for petrol and diesel cars.
Doubling first-year rates for higher-polluting new cars
- From April 1, the first-year rate for cars in all other road tax bands (producing 76g/km or more) will double. This means new cars in the highest band (producing 255g/km or more) will pay £5,490 in the first year.
- The highest rate will apply to 59 new models from 24 car manufacturers, such as Bentley’s Continental W12, Porsche’s 911 Turbo, and Land Rover’s Defender V8.
To find out which set of tax bands applies to your car, check the date of registration in your V5C logbook.
If your car was first registered from March 1, 2001, you can also use our CO2 emissions check tool to find its emissions level. From here, you can work out how much car tax you’ll have to pay by referring to the relevant table below.