Car tax changes launching next week will see petrol and diesel drivers pay up to £140 more every year

Car tax changes launching next week will see petrol and diesel drivers pay up to £140 more every year

WATCH: MAJOR car tax changes scrapped in huge U-turn amid driver concerns

Felix Reeves

By Felix Reeves

Published: 25/03/2024

- 14:04

Chancellor Jeremy Hunt confirmed that car tax rates would go up in April

New car tax changes will launch next week with the vast majority of British drivers set to see their premiums increase.

In the 2023 Autumn Statement, the Government confirmed that it would uprate Vehicle Excise Duty (VED) in line with the retail price index (RPI) from April 1, 2024.

With the launch of the new financial year on Monday, April 1, experts are warning that drivers will see their car tax prices rise.

At the time of the Autumn Statement announcement, the rate of inflation was much higher – at around six per cent.

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Car tax notice

Car tax changes are expected to be unveiled on April 1


Since then, the rate of RPI has fallen, with experts suggesting that the VED increase for cars and drivers across the UK will be less than six per cent.

One expert, Pete Barden, has forecast that the standard rate for cars first registered on or after April 1, 2017, will likely increase from its current level of £180 for most internal combustion engine cars, to around £190.

A similar increase is also likely to be seen in the first-year supplement for cars first registered before April 2017, depending on the emissions output of the vehicle.

Drivers of the most polluting petrol and diesel vehicles will see their prices increase as the Government looks to disincentivise the use of emissions-intensive vehicles.

Experts have suggested that drivers with vehicles registered after April 1, 2017, and have an emissions output of more than 255g of CO2 per kilometre will see the largest hike.

Pete Barden has predicted that the first year rate could see a £140 rise from £2,605 to £2,745.

Other polluting vehicles will see bigger bills including a £85 jump for cars with emissions outputs of 191-225g/km and £120 for vehicles producing 226-255g/km.

Car tax rates are only expected to increase for vehicles that produce more than 76g/km, with the first band seeing prices increase from £130 to £135.

Older vehicles first registered between March 1, 2001, and March 31, 2017, will also face the wrath of higher car tax prices.

The highest and most pollutive vehicle rate – Band M – designates cars which produce more than 255g/km, could see an annual price hike of £40 from £695 to £735, Barden predicted.

The majority of petrol and diesel motorists are likely to see an increase in price over the coming year, although HMRC has not yet finalised the car tax rates for April.

Electric vehicles remain exempt from paying Vehicle Excise Duty (VED) and will not have to pay until April 2025, with Chancellor Jeremy Hunt saying this will create an equal and fair system of motoring taxation.


Motorway traffic

Petrol and diesel drivers are likely to face higher costs from April


However, the Autumn Budget did outline plans to protect some drivers, namely lorry and truck drivers across the UK.

It announced that VED for HGVs and the HGV levy will both remain at 2023-24 rates for 2024-25.

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