Owners of certain vehicles built between this 16 year spell have been slapped with increased Vehicle Excise Duty (VED) car tax rates. Classic cars more than 40 years old are exempt from VED fees due to the historic vehicle tax exemption rules.
However, owners of older cars just under the 40-year threshold still have to pay road tax to get behind the wheel. Cars built over this 16-year spell pay VED rates based on the size of their engine instead of the emissions they produce. Although these road users pay different rates to new vehicles but after 2001, prices have still gone up at the most recent increase this Spring.
VED fees are increased every Spring in line with Retail Price index (RPI) inflation.
HM Revenue and Customs has previously confirmed this year’s increase was simply a “standard uprating” as seen every 12 months.
HMRC said: “This measure will uprate the Vehicle Excise Duty standard rates for cars, vans, motorcycles and motorcycle trade licences (excluding the first-year rates for cars) by the Retail Price Index, and will reflect the inclusion of zero-emission vehicles in Vehicle Excise Duty from 1 April 2025.
“This is a standard uprating to come into effect from 1 April 2025.”
Despite the rise, it is by no means the highest car tax increase in 2025 with some road users paying thousands more to use the roads.
The biggest impact comes to brand new petrol and diesel cars with first-year rates doubling.
It means owners of the most polluting models could pay an extra £2,745 to use the road, taking total bills close to £5,500 per year.