Drivers who own older classic cars are bracing for a hit as they are set to face an increased car tax price which could come as a huge blow.
Vehicle Excise Duty (VED) fees, which are an annual tax paid by owners of vehicles driven or kept on public roads, are set to rise for nearly all petrol and diesel owners this spring with significant changes on the way.
The most substantial alterations will see certain first-year VED rates double, meaning those driving brand-new polluting models could face paying thousands more to use the roads. However, models registered between 1984 and 2001 will also be impacted by the changes, facing slight increases compared to previous rates, the Express reports.
These older vehicles fall under a slightly different tax system, with varying rates for cars with engine sizes above or below 1549cc. According to motoring experts at Pete Barden, motorists in the lower power bracket will pay £220 in 2025/26, marking a modest £10 increase from the current £210 per year charge.
Meanwhile, those with slightly more powerful engines above the 1549cc threshold will pay £15 more from April. Annual rates will stand at £360 over the next financial year, up from the current £345 rate.
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However, these price rises are not as steep as the last increase in spring 2024 when vehicles with engines over 1549cc saw a £20 increase in annual rates, with bills rising from £325 per annum to £345. Vehicles produced after 2001 follow a different VED tax system where engine sizes are no longer considered.
Historic vehicles made before 1984 will continue to benefit from a tax exemption, while HM Revenue and Customs (HMRC) has confirmed Vehicle Excise Duty (VED) rates are set to rise with RPI inflation from April.
HMRC stated: “This measure will uprate the Vehicle Excise Duty rates for cars (excluding first year rates) and all other rates for vans, motorcycles and motorcycle trade licences by the Retail Price Index, and will reflect the inclusion of zero-emission vehicles in Vehicle Excise Duty from 1 April 2025.”
They added: “This is a standard uprating to comes into effect from 1 April 2025.”
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