How Much More Will You Pay? Road Tax Increase Hits This April

Vehicle Excise Duty (VED), commonly referred to as road tax, increases in April 2024. It has been revealed that cars with higher emissions will face an extra charge of £140, and annual rates will climb in accordance with the UK's elevated inflation levels.

Chancellor Jeremy Hunt MP disclosed last November during the Government's Autumn Statement that VED would escalate in tandem with inflation in 2024. HM Treasury has verified that due to recent months witnessing inflation rates as high as 6 per cent, VED has surged by £10 for the year 2024.

The yearly fee for non-zero emissions vehicles purchased after March 2017 rises to £190, up from £180, between years two and six of ownership. Plug-in hybrids retain a £10 discount, matching last year's costs for petrol and diesel cars. Electric and hydrogen fuel cell cars continue to be exempt from VED for another year, but this exemption ends in 2025.

Cars subject to the luxury car tax surcharge now face a £410 payment, up from £390. Thus, vehicles registered after April 2017 with a list price over £40,000 incur a £600 yearly road tax. While expensive EVs currently evade this surcharge, they'll likely face it when they become VED liable in April 2025.

Furthermore, the initial yearly fee for newly purchased vehicles has increased. While zero-emission cars remain exempt for another year, vehicles emitting over 255g of CO2/km face a £140 hike, bringing the first-year Vehicle Excise Duty (VED) up to £2,745. Pre-April 2017 vehicles also witness inflation-aligned increases, with those emitting less than 100g of CO2/km still exempt.

However, there are general increases for older cars. Classic vehicles over 40 years old remain exempt from road tax.

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Source and Image: AutoExpress UK