After the recent Budget announcement, petrol and diesel car drivers may have to prepare for a significant increase in car tax rates next year. The new document released indicates that starting from April 1, 2025, Vehicle Excise Duty (VED) rates will be adjusted according to inflation for most vehicles. This means that individuals purchasing high emission vehicles after this date could potentially face a doubling of VED rates in the following year, particularly for cars with emissions exceeding 255g/km.
Nicholas Lyes, from IAM RoadSmart, expressed his concerns about the impact of increasing vehicle excise duty on all non-zero emission vehicles in the first year, stating that it will have a financial burden on those looking to buy new conventional vehicles. He proposed an alternative solution, suggesting that reducing VAT on the sale of new electric vehicles priced at £40,000 and below would have been a more effective way to promote the adoption of electric vehicles.
The adjustments to the rates are part of the Labour Party Chancellor’s plan to restructure the Vehicle Excise Duty system after April 1, 2025, with the aim of encouraging consumers to transition towards zero-emission and electric vehicles by creating more significant tax gaps between them, hybrids, and traditional combustion engines. For vehicles emitting 171 to 190g/km, the current £1,095 charge will increase to £2,190. Similarly, cars with emissions of 191 to 225g/km will see their charges rise from £1,650 to £3,300, as reported by Birmingham Live. Vehicles emitting 226 to 255g/km will face an increase from £2,340 to £4,680, while those exceeding 255g/km will experience a substantial jump from £2,745 to a staggering £5,490.
The revised car tax rates will be as follows:
– 1 to 50g/km – £10 will rise to £110
– 51 to 75g/km – £30 will rise to £130
– 76 to 90g/km – £135 will rise to £270
– 91 to 100g/km – £175 will rise to £350
– 101 to 110g/km – £195 will rise to £390
– 111 to 130g/km – £220 will rise to £440
– 131 to 150g/km – £270 will rise to £540
– 151 to 170g/km – £680 will rise to £1,360
– 171 to 190g/km – £1,095 will rise to £2,190
These changes reflect the government’s efforts to push towards more environmentally friendly transportation options and reduce carbon emissions. As the automotive industry continues to evolve, consumers will need to consider the long-term implications of these tax increases when making decisions about purchasing new vehicles. It is essential for individuals to stay informed about these developments and explore alternative options, such as electric vehicles, to navigate the changing landscape of car ownership and taxation.