Motorists will still face new car tax changes in days after Rachel Reeves’ Spring Statement made no updates to Vehicle Excise Duty (VED) rules. The Chancellor was not predicted to make any updates to VED fees and didn’t tweak the rules despite costs increasing by thousands of pounds within days.
It means motorists across the board will be slapped with hefty fees from April 1 with petrol, diesel and electric cars all affected. Ahead of the Spring Statement, some campaigners had urged Labour to cut electric car tax fees to act as an incentive to switch to the new models. Most of the VED increases are in line with Retail Price Index (RPI) inflation with standard VED rates up from £190 to £195.
However, first-year rates will dramatically rise with those holding the keys to brand new combustion models emitting over 255g/km of CO2 most affected.
These vehicles will pay a whopping £5,490 to use the roads from April 1, up from the current £2,745.
Meanwhile, first-year rates for vehicles emitting between 226 and 255g/km of CO2 will pay £4,680, up from £2,340.
Cars registered between 2001 and 2017 pay VED based on emissions with cars emitting over 255g/km of CO2 to be charged £760, up from £735.
Electric vehicles will pay VED for the first time in April after years of exemptions and discounts.
Newly registered EVs will be charged just £10 to use the road with owners charged the standard £195 fee from year two.
However, there are fears many EV owners will be caught out by new Expensive Car Supplement (ECS) fees.
This is an extra £425 charge slapped onto motorists’ bills for five years if their model had a list price of over £40,000.
Ahead of the Chancellor’s message, the AA had called on officials to consider discounted car tax fees for electric car owners.
Jack Cousens, head of roads policy at the AA, said: “As most private car buyers opt to buy a used car, the introduction of VED at the full rate from 1 April could have a negative impact on the future of EV ownership.
“Drivers tell us that incentives are still required at this early stage of adoption. While all should pay vehicle tax, a discounted rate for EVs would make buyers take notice before spending their hard-earned cash.”
