New car tax bands mean petrol and diesel drivers will pay £5,490 next year

Major car tax changes unveiled in the Budget could see petrol and diesel drivers pay £5,490 next year. Budget documents state that the Government will uprate standard Vehicle Excise Duty (VED) rates for cars, vans and motorcycles in line with inflation from April 1, 2025.

Drivers who buy the most polluting petrol and diesel cars (over 255g/km) from April 1, 2025, are expected to fork out £5,490 when rates double next year. Nicholas Lyes, director of policy and standards at IAM RoadSmart, said: "Increasing vehicle excise duty on all but zero emission vehicles in the first year will hit those buying new conventional vehicles in the pocket.

"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." It comes after the Labour Party Chancellor said the Government will change Vehicle Excise Duty first year rates for new cars registered after 1 April 2025 to 'strengthen incentives to purchase zero emission and electric cars, by widening the differentials between zero emission, hybrid and internal combustion engine cars'.

READ MORE Petrol and diesel drivers being handed free £130 from today under Labour

New rates

0g/km - £0 will rise to £10

1 to 50g/km - £10 will rise to £110

51 to 75g/km - £30 will rise to £130

76 to 90g/km - £135 will rise to £270

91 to 100g/km - £175 will rise to £350

101 to 110g/km - £195 will rise to £390

111 to 130g/km - £220 will rise to £440

131 to 150g/km - £270 will rise to £540

151 to 170g/km - £680 will rise to £1,360

171 to 190g/km - £1,095 will rise to £2,190

191 to 225g/km - £1,650 will rise to £3,300

226 to 255g/km - £2,340 will rise to £4,680

Over 255g/km - £2,745 will rise to £5,490