Certain motorists will pay up to £560 to use the road under new tax charges introduced by Rachel Reeves. The Chancellor of the Exchequer has overseen major updates to Vehicle Excise Duty (VED) fees this spring, with costs rising for almost all road users from April 1.
One group of drivers most affected by the new changes is owners with keys to brand-new vehicles. First-year tax rates are among the highest, with some highly polluting motorists paying as much as £5,690 to use the road.
However, fees are applied on a sliding scale, and cleaner vehicles are charged a lot less, despite still paying hundreds of pounds. New cars emitting between 131 and 150g/km of CO2 will pay £560 in year one, before reverting to the standard £200 VED fee for all cars registered after 2017 from the second year.
The new £560 fee is a £20 increase on the fees paid by road users before 1 April, where drivers were charged £540 to get behind the wheel. Just over a year ago, first-year tax was massively cheaper, with motorists in this category paying just £270 per annum to get behind the wheel.
Labour decided to double first-year VED rates for all polluting models ahead of the 2025/26 tax year, with the new charges acting as an incentive to switch to cleaner or zero-emission models.
Confused.com said: “When you buy a brand-new car, you’ll pay a first-year rate of Vehicle Excise Duty (VED). This is based on your car’s CO2 emissions. Higher emissions usually mean a higher tax bill. The first-year rate is designed to encourage buyers to choose low or zero-emission cars.”
Families could be hit with the charge, with cars emitting between 131 and 150g/km of CO2 usually consisting of hatchbacks, small SUVs, and some more efficient petrol and diesel saloon models.
HMRC revealed details of the upcoming inflationary tax bands last year, shortly after Rachel Reeves’ Autumn Budget in November. VED is a requirement to use the roads, meaning motorists have to ensure they tax their vehicle every single year.
Car tax costs can be paid annually in one lump fee, or spread over several instalments, although road users using this method will likely pay more.
