Car Tax to Double for 59 Car Models
In April 2025, 59 car models belonging to 24 different brands are set to face a substantial increase in car tax, with some owners seeing their fees more than double to over £5000. These changes in the Vehicle Excise Duty (VED) rates were announced by the Labour-led UK Government in the Autumn Budget last year, with first-year VED fees for certain petrol and diesel models experiencing a significant surge.
The first-year VED fees, which are paid for brand new vehicles before transitioning to the standard rate, will rise on a sliding scale. This increase will particularly impact models that produce over 225 g/km of CO2, affecting popular brands like Ford, Toyota, BMW, Mercedes, Audi, Porsche, Lotus, Lamborghini, and McLaren, as reported by LancLive.
The main reasoning behind the hike in first-year VED rates is to incentivise consumers to opt for electric vehicles and create a wider gap between ‘higher polluting’ vehicles and electric ones. Electric vehicles currently enjoy VED exemption, while cars emitting over 225g/km CO2 will face a hefty £2,745 charge for their initial year. Conversely, from April onwards, EV owners will have to pay a mere £10 for the first year’s VED.
Chancellor Rachel Reeves emphasized the government’s commitment to encouraging electric vehicle adoption and stated that the move to increase first-year tax rates for petrol, diesel, and hybrid vehicles was a strategic decision to push consumers towards EVs. Reeves highlighted that the widening of differentials in Vehicle Excise Duty First Year Rates between EVs, hybrids, and internal combustion engine cars was pivotal in driving the transition towards electric vehicles.
The upcoming changes are expected to have a significant impact on a wide range of car models, affecting customers financially. For instance, a new Ford Puma will see its first-year VED surge from £220 to £440, while a Range Rover owner could be faced with a substantial £5,490 charge, up from £2,745, once the new rates come into effect in April.
In conclusion, the impending increase in first-year VED fees for certain car models signifies a pivotal shift towards promoting eco-friendly transportation options and reducing emissions. As consumers face higher taxes for traditional petrol, diesel, and hybrid vehicles, the government aims to steer the public towards adopting electric vehicles as part of a larger environmental strategy. The transition towards electric vehicles is not only beneficial for the environment but also aligns with global efforts to combat climate change and create a more sustainable future for all.