Car tax rules are changing from tomorrow – see the full list

The beginning of April means major new car tax changes are coming into effect, impacting motorists across the UK.

Possibly the biggest shake-up will be felt by electric vehicle (EV) owners, who will no longer be exempt from paying vehicle excise duty (VED), a tax which hits everyone with a car.

The amount you pay will depend on when your vehicle was registered and how much it is worth.

Here we take a look at all the changes that will take effect from the beginning of April.

EVs no longer exempt from tax

To encourage more people to buy zero-emission cars, EVs in the UK have long been exempt from paying VED.

From tomorrow, April 1, owners will be charged £10 for the first year after their vehicle is registered, and then the standard rate of £195 each subsequent year of ownership.

Those with an electric, zero or low emission cars registered between April 1 2017 and March 31 2025 will have to pay the £195 standard rate from the start.

Then-Chancellor Jeremy Hunt announced the move in December 2022, saying it would ‘make our motoring tax system fairer’.

His policy has been continued by the current Labour government.

Electric cars will also have to pay the ‘luxury car tax’

The luxury car tax is a supplement added to VED for people whose vehicles have a list price of £40,000 or more.

This, too, will apply to electric vehicles from the beginning of next month.

Due to the expense of manufacturing batteries, EVs are often more expensive than their internal combustion counterparts – meaning their owners are more likely to be slapped with the luxury car tax.

Online vehicle marketplace Auto Trader has called for the VED changes to be delayed out of concern it may prevent people going electric.

The site’s commercial director Ian Plummer said: ‘EVs up to five years old on our site are three-and-a-half times more likely to be hit by the expensive car supplement than internal combustion engine cars in the same age range.

‘That kind of difference is unhelpful for efforts to persuade drivers to switch.’

From April 1, owners of these ‘luxury cars’ will pay a supplement of £425 on top of the standard rate for years two to six after a vehicle is first registered.

It will apply to new EVs registered from that date.

Former Fifth Gear presenter Quentin Willson, who is the founder of pro-EV group FairCharge, said: ‘I strongly disagree with the EV expensive car supplement.

‘Six hundred and twenty pounds a year to tax most EVs will discourage private buyers who get no incentive whatsoever to switch from combustion to electric.

‘Ministers say we should drive EVs, while the Treasury creates tax barriers to put us off.’

A Treasury spokesperson said: ‘The shift to electric vehicles will support growth and productivity across the UK and is crucial for tackling climate change.

‘Our balanced approach ensures fiscal stability during the transition to electric vehicles, including by introducing vehicle excise duty on EVs from April 2025, while maintaining targeted incentives to encourage their uptake.’

VED hikes for petrol, diesel and hybrid cars

Cars with CO2 emissions between 1-50g/km (most plug-in hybrids) – who previously paid £10 in the first year, will now have to pay £110.

And cars in the 51-75g/km band will see their first year tax costs go from £30 to £130.

Cars with emissions of 75g/km and more, meanwhile, with see their first year rate double in price.

Company car tax (BIK) rise for all car types

The benefit-in-kind (BIK) rate for zero-emission vehicles is set to go up by 1% each year from 2025 to 2028.

It currently stands at 2%, but will increase to 3% next month, then to 4 per cent in 2026 and 5 per cent in 2027.

For vehicles emitting 75g/km of CO2 or more, the BIK rate will increase by 1% next month and remain at that level until at least 2028.

How can I check my car tax?

You can find out the tax rates for your car on the Gov.uk website.

Drivers will need to have their vehicle’s number plate to hand, as well as the 11-digit reference number that can found in the log book.

Get in touch with our news team by emailing us at webnews@metro.co.uk.

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