Petrol and diesel owners face 'ten-fold increase' in car tax from this date

Owners of petrol and diesel vehicles are set to face a 'ten-fold' increase in car tax charges from this Spring, hitting some combustion owners hard. Vehicle Excise Duty (VED) rates will rise from April 1, 2025, with nearly all motorists affected by the dramatic increases.

While standard rates are set to rise in line with Retail Price Index (RPI) inflation, updates to first-year charges are more extreme. Owners of vehicles emitting over 76g/km of CO2 will see costs double from April, with many of the most polluting vehicles paying thousands more.

However, low-emitting models generating between 1-50g/km of CO2 will see the biggest percentage rise. According to car insurance specialists and breakdown experts at the RAC, motorists in this category face a 'ten-fold' rise.

They confirmed the rise would apply to many hybrid cars which are fitted with both an electric car battery and a combustion engine. They explained: "The biggest news is the ten-fold increase in first-year car tax rates for cars emitting between 1-50g/km of CO2, which includes hybrids."

"These will increase from the current rate of £10 for petrol and diesel cars (or zero for hybrids) to £110. The vast majority of plug-in hybrid cars fall into this band.", reports the Express.

"Rates for new cars emitting between 51-75g/km of CO2 will increase from £30 (or £20 for hybrids) to £135."

Drivers have also been warned of two new tests they could face when renewing their licence, if born before 1955.

Labour confirmed first-year VED costs would increase in 2025 as part of Chancellor Rachel Reeves' Autumn Budget statement.

HM Revenue and Customs have confessed that upcoming changes in vehicle excise duty will "widen the difference" between traditional and electric vehicles. They have also highlighted that the updates are set to draw hybrids "closer to higher emitting cars" The department elucidated: "Vehicle Excise Duty first-year rates are paid for the first year of a car's lifecycle, at the point of registration, and vary based on emissions."

They announced, "From 1 April 2025, the Vehicle Excise Duty first-year rates will be changed to widen the difference between zero-emission, hybrid and internal combustion engine cars."

Adding further details, they specified, "From 1 April 2025, zero-emission cars will pay the lowest first-year rate. Rates for cars with CO2 emissions of 1 to 50 grams per kilometre and 51 to 75 grams per kilometre, including hybrid vehicles, will increase to bring them closer to higher emitting cars."