New car tax bands mean petrol and diesel drivers will pay £5,490 next year (Image: Getty Images/iStockphoto)

Car tax changes in new Budget will see petrol and diesel drivers pay up to £5k

by · Daily Record

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Significant changes to car tax announced in the Budget could result in petrol and diesel vehicle owners paying up to £5,490 next year.

According to the Budget documents, from April 1, 2025, the Government plans to adjust standard Vehicle Excise Duty (VED) rates for cars, vans, and motorcycles to reflect inflation.

Owners of the highest polluting petrol and diesel vehicles (emitting over 255g/km) will be hit with a whopping £5,490 charge from April 1, 2025, as rates are set to double, as reported by Birmingham Live.

Nicholas Lyes, director of policy and standards at IAM RoadSmart, commented: "Increasing vehicle excise duty on all but zero emission vehicles in the first year will hit those buying new conventional vehicles in the pocket."

He suggested that, "A better solution to incentivise the take-up of electric vehicles would have been to cut VAT on the sale of new electric vehicles with a list price of £40,000 and under."

New car tax bands is set to hit those buying new conventional vehicles in the pocket

It comes following the Labour Party Chancellor's announcement that the Government will modify Vehicle Excise Duty first-year rates for new cars registered after April 1, 2025.

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The move has been made in a bid to "strengthen incentives to purchase zero emission and electric cars, by widening the differentials between zero emission, hybrid and internal combustion engine cars."

The new VED rates will see increases in:

  • Vehicles emitting 0g/km will see an increase from £0 to £10.
  • Those with emissions from 1 to 50g/km will go from £10 to £110.
  • For 51 to 75g/km, the rate will rise from £30 to £130.
  • Cars emitting 76 to 90g/km will jump from £135 to £270.
  • The rate for 91 to 100g/km will increase from £175 to £350.
  • Vehicles with emissions of 101 to 110g/km will see a rise from £195 to £390.
  • For those emitting 111 to 130g/km, the rate will go from £220 to £440.
  • Cars with emissions of 131 to 150g/km will face an increase from £270 to £540.

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