Petrol, diesel and electric vehicle owners to see huge car tax hikes today with millions impacted

Budget documents stated that, in keeping with tradition, the standard VED rate for cars, vans and motorcycles, excluding first year rates for cars, would increase.

Vehicles which were registered after April 1, 2017, will pay the standard rate of VED, which has risen from £190 to £195.

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Depending on the emissions output of certain vehicles registered between March 2001 and March 2017, drivers may escape paying more than last year.

Cars with an emissions output of up to 100g/km of CO2 (Band A) will see prices rise from £0 to £20, while Bands B and C will retain the same cost as last year.

Any car which emits more than 121g/km will see prices rise from as little as £5 for Band D to as much as £25 for vehicles in Band M.

Cars and light goods vehicles registered before March 1, 2001, have also seen a slight increase in cost, in line with inflation.

Any cars with an engine not over 1,549cc will pay £220 a year, up from £210 last year. People with an engine over 1,549cc will pay £360, representing a £15 rise compared to 12 months ago.

There may be some joy for motorists around the country, as vehicles over 40 years old will avoid Vehicle Excise Duty, with all cars registered before April 1, 1985, being exempt from tax.

Electric vehicle owners are also now liable to pay Vehicle Excise Duty, which they had previously been exempt from.

While any new electric vehicles registered after April 1, 2025, will only have to pay a first year rate of £10, they will fork out £195 for the standard rate the year after.

Chris Rosamond, current affairs and features editor at Auto Express, warned that electric vehicle buyers would face "yet another financial hurdle" with the Expensive Car Supplement.

From April, electric vehicle owners will also be required to pay the "luxury car tax" if their car has a market value of more than £40,000.

Data from Auto Express, obtained via a Freedom of Information request to the DVLA, found that almost a third of cars are already subject to the additional rate of VAT.

It also estimates that up to 70 per cent of new electric vehicles sold will also be required to pay the fee, since many are above the £40,000 threshold.

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Rosamond noted: "This is partly because EVs tend to be more expensive than petrol or diesel cars, but also because the luxury car tax has been set at the same rate since 2017, whereas new car prices have gone up 40 per cent over the last decade."