Major car tax changes have come into effect today with petrol, diesel and electric car owners all set to feel the sting. Unlike previous years, Retail Price Index (RPI) inflation increases are followed by a series of further rises.
New fees for electric car owners and higher first-year tax rates are among the headline changes with many set to be affected. The new rules mean almost every single motorist will be impacted in some way with many seeing bills rise by thousands of pounds. Vehicle Excise Duty (VED) updates came into effect from April 1, 2025, with road users renewing their tax set to see the updates from today.
Will electric vehicles pay car tax?
Yes, electric cars have previously been exempt from VED car tax fees but will not enjoy the benefit from April 2025.
Electric models will be moved to the standard rate meaning individuals will pay £195 per year to use the roads.
However, the high upfront cost of electric cars means many road users could be hit with an additional Expensive Car Supplement (ECS) fee.
This is an extra £425 charge applied to road users with keys to models over £40,000.
Who will be most affected by new car tax changes?
Those set to feel the biggest sting from the new VED car tax updates are owners of brand new highly-polluting models.
Those buying brand-new cars emitting over 255g/km of CO2 will see first-year rates double with costs rising from £2,745 per year to £5,490.
Those emitting between 226 and 255g/km of CO2 also face hefty increases with bills up from £2,340 to £4,680.
When did new car tax fees launch?
The new Vehicle Excise Duty fees have already launched with fees coming into effect from April 1, 2025.
VED rates are usually updated every Spring meaning motorists should not see any VED rises for another 12 months.
