Drivers have been warned they have less than a month until Rachel Reeves's car tax changes come into effect, which will see some motorists pay 1,000 per cent more.
Changes to Vehicle Excise Duty will be introduced on April 1, impacting petrol, diesel and electric car owners for the first time.
Before the new rates come in, drivers have been warned to expect hefty increases in car taxes, with drivers paying an average of 100 percent more.
Electric cars will be hit particularly hard with drivers set to pay VED rates for the first time with vehicles registered after April 1 seeing payments rise to £10 for first year bands before moving to £195 for second year fees.
Do you have a story you'd like to share? Get in touch by emailingmotoring@gbnews.uk
Car tax hikes will increase for vehicles registered between April 1, 2017, and March 31, 2025
X/DVLA/PA
However, vehicles registered between April 1, 2017, and March 31, 2025, will pay the same amount as petrol and diesel cars at £195, immediately from April, marking a 100 percent increase in car tax payments.
Experts from Dick Lovett explained: "If you’ve treated yourself to a shiny new car in the past few years, you’ll be familiar with the higher rate of road tax drivers need to pay in the first year (this is included within the purchase price of the vehicle).
"The rate drivers pay for this first year all depends on their car’s CO2 emissions—and it rises periodically with inflation."
The changes to car tax payments were announced in the Autumn Budget last year, with Labour increasing charges for petrol, diesel and electric car drivers.
The lowest polluting non-electric vehicles (1-50g of CO2 per kilometre) will see costs rise 1,000 per cent from £10 to £110.
The Government currently classifies ultra low emission vehicles (ULEVs) as any cars that emit less than 75g/km, but under the reclassification, ULEVs which 51-75g/km will see a 333 per cent increase in the amount they pay for first year tax, going up from £30 to £130.
Meanwhile, for motorists with vehicles emitting more than 255g/km of CO2, their average road tax rises by 100 per cent from £2,745 in 2024/25 to £5,490 in 2025/26.
On top of increases for car taxes, Reeves also announced changes to the Expensive Car Supplement which will become effective from April 1.
This luxury car tax hike will see charges increase from £410 to £425 per year, alongside an introduction for EVs priced over £40,000, which were previously exempt from the charge.
Dick Lovett added: "Those with vehicles also subject to the Expensive Car Supplement will stay within three figures on their total tax first year costs (including the increased expensive car supplement) unless their vehicle produces more than 151g/km..
"Costs [will rise] from £680 to £1,360 - a cost increase of an eye-watering £680 compared to the 24/25 tax year. Those that produce more CO2 will see similar 100 per cent increases."
The Office for Budget Responsibility shared forecasts that VED will raise £8.3billion for the Governemnt in 2024-25, which represents around 0.7 per cent of all receipts.
LATEST DEVELOPMENTS:
- Drivers slapped with hefty fines accuse parking company of 'bullying' motorists with 'faulty machines'
- M62 traffic: Drivers warned of long delays after man dies in horror crash and fire on major motorway
- Driving law changes gain support amid calls to crack down on motorists with '1,000 more roads police'
Changes to the Expensive Car Supplement will be made on April 1
X/DVLA
It added: "Receipts have been revised up by an average of £0.2billion a year since March, which is explained by an increase in the first year VED rate for petrol, diesel and hybrid vehicles and a first year duty rate freeze for EVs announced at this Budget, which increases receipts by £0.3billion on average each year from 2025-26."
