Substantial Tax Increases for Low-Emission Vehicles Confirmed
Motorists across the UK are facing significant financial changes as new Vehicle Excise Duty (VED) bands come into effect this April, with particular impact on low-emission and electric vehicles. Car experts are issuing urgent warnings to drivers about the substantial price rises that will affect popular vehicle types under the current government's taxation policies.
Drastic Changes to Zero Emission Vehicle Taxation
Industry specialists at Parkers have highlighted what they describe as "quite a drastic change from before." Previously, zero emission vehicles enjoyed completely free First Year Rates, but this advantage has now been eliminated. The new system introduces a ten-pound rise that signals the end of what experts are calling "the EV free-ride."
Specific Increases for Low-Emission Categories
The detailed breakdown reveals substantial jumps for vehicles in key emission bands:
- Cars emitting 1-50g/km of CO2 will see their tax increase from £10 to £110 - a tenfold rise
- Vehicles in the 51-76g/km CO2 band face a similar substantial jump from £30 to £130
- This affects all low-emission vehicles including popular plug-in hybrid models
According to motoring analysts, this represents a strong indication from government that they're backing fully electric vehicles while imposing heavier taxation on any emission-producing vehicles moving forward.
Higher Emission Vehicles Face Even Greater Increases
Cars producing more than 76g/km of CO2 will bear the heaviest brunt of the increased costs. Every vehicle in these higher emission bands now has its VED doubled, affecting everything from compact city cars like the Hyundai i10 to luxury vehicles such as the Rolls Royce Phantom. This means tax bills will skyrocket across a wide range of popular vehicle types.
Important Financial Considerations for Drivers
Experts note that first-year VED charges are typically included in monthly payments for car leasing deals, but this doesn't apply to traditional financing arrangements. This distinction could significantly affect budgeting decisions for both private and business motorists considering their next vehicle purchase.
Future Changes: Pay-Per-Mile Road Tax Proposal
Looking further ahead, the government has proposed additional changes that will specifically target electric vehicle drivers. The "VED+" system, expected to be announced in the November 2025 Budget, would introduce a pay-per-mile charge for electric vehicles.
The proposed structure includes:
- A rate of 3 pence per mile for electric vehicle usage
- This would be charged in addition to the standard £195 annual VED that EV owners already pay
- Expected implementation from April 2028 following public consultation
This system aims to address the significant decline in fuel duty revenue as more drivers transition to electric vehicles. The government has indicated that this timeline allows for proper planning and ensures the electric vehicle market has matured sufficiently before implementation.
The combination of immediate VED increases and future mileage-based charges represents a fundamental shift in how vehicle taxation operates in the UK, with clear implications for motorists' purchasing decisions and ongoing vehicle ownership costs.
