The car tax increase will happen in April 2025
Some 59 cars from 24 manufacturers and brands, including the likes of Ford, BMW and Mercedes, will face car tax increase of up to £2,745 in April next year.
The change is the results of changes to Vehicle Excise Duty (VED) rates announced by Chancellor Rachel Reeves in Labour’s Autumn Budget.
The government decided to significantly raise first-year VED fees for petrol and diesel models from April 2025. The fees are paid by owners of brand-new vehicles before they switch to the standard rate.
The tax hike applies to all drivers of new petrol, diesel and hybrid vehicles, and is designed to encourage people to buy electric cars. Electric vehicle owners are exempt from VED, but will have to pay a £10 charge for their first year from April.
Announcing the car tax hike in her Budget, Chancellor Rachel Reeves said: “To help drive the transition to electric vehicles the government is strengthening incentives to purchase EVs by widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars.”
“The government is also maintaining EV incentives in the Company Car Tax regime and extending 100% First Year Allowances for zero emission cars and EV charge points for a further year.”
Not all vehicles will be subject to the same increase though, with first year tax figure for each vehicle worked out by taking into account how much carbon dioxide it produces.
Only cars producing over 255 g/km of CO2 are set for the highest increase of £2.745, but this does include some popular models.
Overall, most of the higher tiers of will see the fees double from 2024 levels.
The likes of Ford, Toyota and Mercedes will all be affected by the VED hike, along with more high-end brands such as Porsche, Lamborghini and McLaren.
A spokesperson for the Treasury confirmed to Car Dealer Magazine that the tax hike would see a new Ford Puma driver face a first-year VED rate increase from £220 to £440.
Meanwhile, a high-emissions vehicle, such as a Range Rover, could see its VED rate doubled from £2,745 to £5,490 in the first year of ownership.
In fact, there are 59 vehicles that produce over 255 g/km and could be subject to the highest increase, Lancashire Live reports.
The full list of these vehicles is as follows:
- Audi RS6 4.0 TFSI V8
- Audi S8 4.0 TFSI V8
- McLaren GT 4.0T V8
- Audi R8 5.2 FSI V10
- Lamborghini Huracan 5.2 V10
- Chevrolet Corvette Stingray 6.2 V8
- Volkswagen Amarok 3.0 TDI
- Aston Martin DBX 4.0 V8
- Ferrari Roma 3.8T V8
- Audi SQ7 4.0 TFSI V8
- Range Rover Sport 4.4P V8
- Jaguar F-Pace 5.0 P575 V8
- Aston Martin DB12 4.0 V8
- Porsche 911 3.7T 992 Turbo
- Jeep Wrangler 2.0 GME
- Ford Ranger 2.0 TD EcoBlue
- Audi RSQ8 4.0 TFSI V8
- Lotus Emira 3.5 V6
- Bentley Continental 4.0 V8
- Audi SQ8 4.0 TFSI V8
- Aston Martin Vantage 4.0 V8
- Toyota Hilux 2.8D
- Porsche Macan 2.9T V6
- Mercedes-Benz SL55
- Range Rover 4.4 P530 V8
- Mercedes-Benz AMG GT 4.0 V8
- Porsche 718 Cayman 4.0 GT4
- Lamborghini Urus 4.0 V8 BiTurbo
- Audi RS7 4.0 TFSI V8
- Ford Mustang 5.0 V8
- Toyota Land Cruiser 2.8D
- Bentley Continental 6.0 W12
- Mercedes-Benz GLC63
- Ford Ranger 3.0 V6
- INEOS Grenadier 3.0P
- Range Rover 4.4 P615 V8
- Land Rover Defender 90 5.0 P425 V8
- Rolls-Royce Ghost 6.75 V12
- Ford Ranger 3.0 EcoBlue
- Mercedes-Benz G63
- Ferrari Purosangue 6.5 V12
- Rolls-Royce Cullinan 6.75 V12
- Alfa Romeo Stelvio 2.9 V6 Bi-Turbo
- Mercedes-Benz GLE63
- Maserati Levante 3.0 V6
- Porsche Cayenne 4.0T V8
- BMW M8 4.4 V8
- Maserati MC20 3.0 V6
- Land Rover Defender 110 5.0 P425 V8
- Mercedes-Benz G400D
- Lamborghini Revuelto 6.5 V12
- Bentley Bentayga 4.0 V8
- BMW X7 M 4.4 V8
- BMW X6 M 4.4 V8
- BMW Alpina XB7 4.4 V8
- Bentley Flying Spur 4.0 V8
- Maserati Levante 3.8 V8
- BMW X5 M 4.4 V8
- Mercedes-Benz GLS63h