Drivers of certain low-emission cars made before 2017 have lost a free tax perk after Chancellor Rachel Reeves scrapped the zero-rate vehicle tax band. Owners of vehicles in Band A, which have emissions of up to 100g/km, previously paid nothing but will now face an annual charge of £20.
Changes to Vehicle Tax Bands
The Treasury confirmed the removal of the zero-rate band, meaning these motorists must pay vehicle tax for the first time. Cars are placed in tax bands based on CO2 emissions, and Band A cars were previously exempt. The change surprises many drivers who had grown accustomed to paying nothing.
Wider Shift in Tax Policy
This move continues a trend of ending free tax perks for low-emission and electric vehicle (EV) owners. The Government now requires tax revenue from these drivers. Households with newer EVs must already pay the standard £200 rate, similar to petrol and diesel car owners. A pay-per-mile tax targeting these motorists is also planned for 2028.
Expert Commentary
Andy Wood, tax expert at Tax Barrister UK, said: “A lot of drivers still assume road tax is calculated purely on the age of the vehicle, but emissions remain one of the biggest factors in determining how much motorists pay. Even relatively modest differences in CO2 output can place vehicles into entirely different tax bands, which can have a noticeable impact on annual running costs.”
He added: “The removal of the zero-rate band for cars emitting under 100g/km has caught some drivers off guard because many had become used to paying nothing at all. While £20 may not sound substantial on its own, it reflects a wider shift towards bringing more vehicles into the VED system regardless of emissions performance.”
