Car tax will SOAR for millions after 2025 rule change with drivers forking out £1,000s more – how much will it cost you?

FIRST-year car tax rates are set to go up from April this year.

Diesel buyers face an average increase of £1,114 – more than double the £503 rise for petrol drivers.

Hybrid owners will pay between £135 and £327 extra, depending on the specific model they buy.

Chancellor Rachel Reeves made some adjustments to the VED tax bands in her Autumn Budget.

Ms Reeves said she was making the changes to “strengthen incentives to purchase zero-emission and electric cars” by making it more expensive to drive petrol or diesel models.

Under the bands, cars are categorised based on their C02 emissions, measured in grams per kilometre.

With the new rates, the most polluting vehicles producing over 255g/km will see a whopping £2,745 increase from £2,745 to £5,490 – a hike of 100 per cent.

Here are some of the nation’s best-selling new cars set to be impacted:

Volkswagen Polo – increase of up to £270

A firm favourite among Brits, the Polo – first released in 1975 – is now in its sixth generation, on sale since 2018.

Green-thinking drivers can get their hands on the 1.0-litre TSI petrol version, with a manual transmission, in Life trim, for £22,150.

But with CO2 emissions of 116g/km, buyers will see the cost of first-year VED increase from £220 to £440 from April 1.

However, the Polo GTI, with its 2.0-litre turbo petrol engine and seven-speed automatic gearbox, puts out 149g/km CO2.

This means buyers will have to fork out an extra £270 in first year VED from next year when the rate doubles to £540.

Tesla Model Y – increase of £10

As mentioned, from April 1, all zero-emission electric cars, including Tesla‘s best-selling Model Y, will be forced to pay VED – although it’s unlikely to break the bank.

Indeed, EV drivers will only be paying the lowest showroom tax rate – just £10.

Reeves confirmed in the Budget that this will be retained until 2029-30, in a bid to incentivise drivers to switch to electric cars.

However, data from the Daily Mail suggests seven in ten new EVs registered in Britain will be hit by an existing supplementary tax.

Known in some circles as the luxury car tax; this exists for any brand-new model across all fuel types with starting price of £40,000 or more.

That means all Model Y iterations fall under this category – even the least expensive Model Y, the Long Range Rear-Wheel Drive, priced from £46,990.

The premium tax is applied from the vehicle’s second year and currently adds £410 to the VED bill for five years in total. This is likely to rise with RPI from April.

Recently, industry groups have lobbied the government to scrap luxury car tax for EVs.

Audi A3 – increase of up to £1,650

By far the cheapest Audi A3 to tax from 1 April next year will be the brand’s plug-in hybrid variant, the ’40 TFSI e S-Tronic’, which puts out CO2 emissions as low as 7g/km CO2.

However, the sporty RS3 version will cost a staggering £3,300 to tax for 12 months.

MG HS – increase of up to £1,095

Britain’s most popular budget-friendly SUV, sold with a plug-in hybrid drivetrain, will cost £110 to tax from April – up from just £10 currently.

Its highest emitter will be subject to a showroom tax of £2,190.

Hyundai Tucson – increase of up to £680

Buyers of the Tucson, the hugely popular compact family SUV, will pay a varying amount of VED – depending on which fuel-type they buy.

Official combined CO2 emissions across the Hyundai Tucson line-up range from 22 to 158g/km, which translates to increased first-year VED of between £100 and £680.

The highest rate is attached to the petrol-powered 1.6T 160PS 6 Speed Manual 2WD N Line S, which starts from £34,500.

Volkswagen Golf – increase of up to £1,095

The world’s most iconic hatchback, which celebrated its 50th birthday in 2024, is another that will see a mighty increase in 2024.

The cheapest Golf in terms of first-year taxation – the entry-level petrol version – will double from £220 to £440.

But high-performance Golf R hot hatch will see a rise of £1,095 to £2,190.

Nissan Juke – increase of up to £270

The highest emitting version of Juke has an output of 138g/km CO2.

In showroom tax terms, this translates to a £270 increase in VED to £540 from 1 April.

However, the least-emitting powertrain, the 1.6-litre hybrid 143 N-Connecta, qualifies for a tax rate of £185 today, which will double to £370 from April 1.

Nissan Qashqai – increase of up to £680

The wildly popular family-size SUV will see a £940 difference in showroom tax rates between the greenest hybrid version and its most polluting petrol.

That highest rate is for the DiGT 158 4WD Xtronic automatic in Tekna+ trim, which can be bought new at £42,610.

By 2030, the mega-selling Qashqai and Juke will become electric only, like the Leaf.

Kia Sportage – increase of up to £270

The Sportage has been the success story of 2024 – overtaking the Qashqai as the nation’s favourite mid-size SUV.

The highest emitting version of the family-friendly motor puts out 149g/km CO2, which will see showroom tax rates rise from £270 today to £540 from April 1.

Ford Puma – increase of up to £270

It was the best-selling new car in 2023, and the Puma is leading the way in 2024, too.

Buyers of the least emitting version of the favourite Ford can expect to see showroom tax rates rise by £220 to £440 next year.

The highest CO2 output across the Puma line-up is for the sporty ST.

With the addition of a panoramic roof and tow bar, emissions rise to 137g/km.

As such, today’s £270 first-year VED rate will become £540 by the time April 1, 2025, rolls around.