Petrol and diesel drivers will be forced to pay higher car tax fees in 2024 with Vehicle Excise Duty (VED) rates set to rise from April.
The Treasury has confirmed VED rates will rise with inflation from April 1 with some owners set to pay over £100 more to use the roads.
The changes could have a major impact on families already struggling with the increased price of motoring amid the cost of living crisis.
HM Revenue and Customs has confirmed the increased costs will “ensure that VED receipts are maintained in real terms”.
It will also ensure motorists will “make a fair contribution to the public finances”.
The Treasury explained: “The Government will uprate VED rates for cars, vans and motorcycles in line with RPI from April 1, 2024 in the Autumn Finance Bill 2023.
“To support the haulage sector, VED for HGVs and the HGV levy will both remain at 2023-24 rates for 2024-25.”
According to finance expert Pete Barden, fees will likely rise by less than six percent for cars this spring. This will increase the standard rate for vehicles registered on or after April 1, 2017, from £180 for most to around £190.
Owners purchasing brand-new polluting models emitting over 255g/km of CO2 are set to be the most affected by the changes.
Predictions indicate motorists who register these new models will be slapped with a whopping £140 increase in first-year costs
According to experts at Pete Barden, the bill will be a staggering £2,745 in year one compared to the current £2,605 charge.
Owners of older models registered on or after March 1, 2001, will also be slapped with higher charges.Those with the most polluting models producing Over 255 g/km of CO2 will pay £735 per annum compared to £295 today.
However, prices are not set to increase for older low emissions vehicles with rates staying the same for models producing up to 120 g/km of CO2.
Price rises start from Band D, covering vehicles between 121 and 130 g/km of CO2 with a slight £10 rise.
HMRC claimed the changes are not expected to have any major economic impact. However, they did expect there to be some impact on individuals, households and families.
They explained: “This measure will impact on motorists owning a car, van or motorcycle or using a motorcycle trade licence. The increase in VED rates is in line with RPI meaning rates will remain unchanged in real terms for vehicle owners.
“The measure is not expected to impact on family formation, stability or breakdown. Customer experience is expected to remain broadly the same as this measure does not make any changes to the operation of the tax.”
