While many measures were introduced in the Budget to support motorists, owners of a certain type of vehicle will need to pay road tax for the first time
UK motorists are being warned to expect a change in road tax that could impact more than a million cars following the recent Autumn Budget. On Wednesday, Labour delivered the first Budget in 14 years, promising to grow the economy and fix its foundations.
Chancellor Rachel Reeves, the UK’s first female Chancellor, said the government would “invest, invest, invest” but added the “black hole” left by the Conservatives requires tens of billions of additional taxes. Ms Reeves introduced several steep tax rises, as well as a number of incentives to encourage electric vehicle sales.
While presenting her first Budget in the House of Commons, the Chancellor explained one of these measures would be a different tax rate in comparison to petrol or diesel models, reports the Express. She explained: “I will maintain the incentives for electric vehicles in company car tax from 2028 and increase the differential between fully electric and other vehicles in the first year rates of Vehicle Excise Duty from April 2025. These measures will raise around £400 million by the end of the forecast period.”
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Whilst the Labour Government ruled out introducing a pay-per-mile system of taxation ahead of the Budget, electric car owners will be charged road tax for the first time from April 2025. During the first year, electric vehicles will be subject to a charge of £10, a figure the Government claims will be frozen until the 2029-30 tax year.
Hybrid owners will also see an increase in road tax, with vehicles making between one and 50g/km of carbon dioxide being charged £110 and drivers of cars that produce 51-75g/km paying £130. In comparison, petrol and diesel models will also see a significant rise in the price owners will need to pay in the car’s first year on the roads.
Smaller superminis that produce between 111 to 130g/km of CO2, such as the Volkswagen Polo and Citroen C3, will need to pay £440 – double the amount drivers currently face. Larger vehicles that make between 131 to 150g/km will be subject to a charge of £540, whereas those producing between 150 and 170g/km will face a staggering £1,360 charge.
New vehicles with a list price of £40,000 will also be subject to the luxury car tax of £410 for the first five years it is on the road.
