Major Car Tax Increase Targets High-Emission Vehicles from April
Thousands of motorists across the UK are bracing for a substantial financial impact as a significant overhaul of Vehicle Excise Duty (VED) comes into effect. Starting April 1, 2025, owners of 59 specific vehicle models from over 20 manufacturers will face a first-year registration fee of £5,690, marking a dramatic rise in costs for high-polluting cars.
Substantial Financial Blow for Drivers
The Treasury's aggressive new tax brackets are designed to penalise petrol and diesel vehicles with high emissions, with some owners already experiencing increases of up to £2,745. This policy, championed by Chancellor Rachel Reeves, aims to "drive the transition to electric vehicles" by creating a wider price gap between traditional combustion engines and greener alternatives.
While these eye-watering sums apply only to the initial year of ownership, the tiered VED system means the most polluting vehicles will see their charges roughly double compared to 2024 levels. Major automotive brands including Ford, BMW, and Mercedes will have specific models caught in this new tax net, alongside luxury and high-performance marques such as Porsche, Lotus, Lamborghini, and McLaren.
New Tax Rates and Luxury Supplement
The Government is specifically targeting cars emitting more than 255g/km of CO2, which will incur the maximum £5,690 charge. Below is a summary of the expected first-year vehicle tax rates effective from April 1, 2025:
- 0g/km - Remains at £10
- 1-50g/km - Rising from £110 to £115
- 51-75g/km - Rising from £130 to £135
- 76-90g/km - Rising from £270 to £280
- 91-100g/km - Rising from £350 to £365
- 101-110g/km - Rising from £390 to £405
- 111-130g/km - Rising from £440 to £455
- 131-150g/km - Rising from £540 to £560
- 151-170g/km - Rising from £1,360 to £1,410
- 171-190g/km - Rising from £2,190 to £2,270
- 191-225g/km - Rising from £3,300 to £3,420
- 226-255g/km - Rising from £4,680 to £4,850
- Over 255g/km - Rising from £5,490 to £5,690
Additionally, vehicles with a price tag exceeding £40,000 are subject to an extra 'luxury' supplement, which has recently increased to £425 per year. This additional levy applies from the second through the sixth year of ownership, potentially adding £2,125 to the total running costs of premium vehicles.
Electric Vehicle Incentives and Future Changes
Currently, electric vehicle (EV) owners benefit from a VED exemption, while cars emitting between 111g and 150g/km face a more modest £220 charge. Chancellor Reeves emphasised in her Budget speech that the Government is "strengthening incentives to purchase EVs by widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars."
Looking ahead, the Government plans to introduce a 'mileage tax' for electric and hybrid vehicles starting in April 2028. This initiative aims to recoup lost fuel duty revenue, with estimates suggesting EV drivers could pay around £300 per 10,000 miles driven.
Affected High-Emission Models
A comprehensive list of new models emitting more than 255 g/km has been released, including:
- Alfa Romeo Stelvio 2.9 V6 Bi-Turbo
- Aston Martin DB12 4.0 V8
- Audi R8 5.2 FSI V10
- BMW M8 4.4 V8
- Ford Mustang 5.0 V8
- Lamborghini Huracan 5.2 V10
- Mercedes-Benz AMG GT 4.0 V8
- Porsche 911 3.7T 992 Turbo
- Range Rover 4.4 P530 V8
- Rolls-Royce Cullinan 6.75 V12
Following the first year, vehicles will transition to the standard rate, projected at £200 (currently £195). This VED overhaul represents a significant shift in automotive taxation policy, directly impacting both everyday drivers and luxury car enthusiasts while pushing the UK toward a greener transport future.
