Petrol and diesel owners have been hit with up to a ‘ten-fold’ car tax rise in 2025 in a major blow to motorists. Drivers with the keys to certain combustion vehicles were hit with hefty rises back in April as part of widespread updates to Vehicle Excise Duty (VED) fees.
VED fees are calculated on vehicle emissions meaning those that emit more pollution are usually charged the most. However, some of the least polluting combustion vehicles emitting between just 1 and 50g/km of CO2 were hit with some of the steepest rises. Many plug-in hybrid models were also affected by the increase, which saw bills rise from just £10 to over £100.
The warning was issued by the RAC ahead of the changes earlier this Spring with road users now feeling the effects.
The RAC explained: “The biggest news is the ten-fold increase in first-year car tax rates for cars emitting between 1-50g/km of CO2, which includes hybrids.
“These will increase from the current rate of £10 for petrol and diesel cars (or zero for hybrids) to £110. The vast majority of plug-in hybrid cars fall into this band.
“Rates for new cars emitting between 51-75g/km of CO2 will increase from £30 (or £20 for hybrids) to £135.”
Meanwhile, highly polluting models producing between 226 and 255g/km will see fees rise from £2,340 to £4,680.
Specialists at Pete Barden explained: “Starting from April 1, 2025, the UK’s Vehicle Excise Duty (VED) rates for new cars are set for a major overhaul, with significant increases in first-year rates for certain vehicle emissions categories.
“The government explains these changes as a way to “strengthen incentives” for choosing zero-emission and electric vehicles by expanding the cost differences between electric, hybrid, and internal combustion engine (ICE) vehicles.”
