{"id":72994,"date":"2025-02-07T05:37:20","date_gmt":"2025-02-07T05:37:20","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/insurance\/uk-car-tax-changes-2025-what-you-need-to-know\/"},"modified":"2025-02-07T05:37:20","modified_gmt":"2025-02-07T05:37:20","slug":"uk-car-tax-changes-2025-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=72994","title":{"rendered":"UK car tax changes 2025: what you need to know"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div itemprop=\"text\">\n<p>Driving is about to get more expensive in 2025, and not just for petrol and diesel vehicles; owners of electric vehicles (EVs) will be hit too. As part of her Autumn budget, chancellor Rachel Reeves has announced significant tax increases, with motorists set to feel the blow. Tax rates can be confusing, especially when it comes to motor vehicles. But don\u2019t worry, we\u2019re here to help. Below is a full guide on everything you need to know about car tax changes in 2025:<\/p>\n<h2 class=\"wp-block-heading\" id=\"What-is-car-tax-and-why-do-I-have-to-pay-it?\">What is car tax and why do I have to pay it?<\/h2>\n<p>Vehicle Excise Duty (VED) \u2013 also known as car tax or road tax \u2013 is an annual tax that vehicle owners in the UK must pay to legally drive on public roads. The amount you pay depends on factors like your car\u2019s engine size, fuel type, and CO2 emissions.<\/p>\n<p>VED also helps fund road maintenance and infrastructure, promoting cleaner, more environmentally friendly vehicles.<\/p>\n<p>New VED rates are set to increase in line with inflation as measured by the Retail Price Index (RPI).<\/p>\n<p>You have to pay VED to ensure your vehicle is legally compliant and to contribute to the upkeep of roads and related services. Plus, it\u2019s a way to encourage people to opt for more eco-friendly cars by making higher-emission vehicles more expensive to tax.<\/p>\n<h2 class=\"wp-block-heading\" id=\"How-is-car-tax-calculated?\">How is car tax calculated?<\/h2>\n<p>The amount of VED you pay is based on the type of vehicle you drive and the type of fuel it uses. For cars registered after 1st March 2001, VED is determined by the vehicle\u2019s CO2 emissions, which are based on manufacturer data and divided into bands from A (lowest) to M (highest) according to the CO2 emitted per kilometre (g\/km). For cars registered before 1st March 2001, VED is based on engine size. You can find <a href=\"https:\/\/www.gov.uk\/vehicle-tax\">VED rates and more information here on the Government website<\/a><\/p>\n<h2 class=\"wp-block-heading\" id=\"How-much-will-my-car-tax-be-in-2025?\">How much will my car tax be in 2025?<\/h2>\n<p>For cars registered after April 1, 2017, the new rules will apply. However, cars registered before that date will continue to be taxed under the previous system. Vehicles registered between 1984 and 2001 have unique tax rules based on engine size.<\/p>\n<h3 class=\"wp-block-heading\">Petrol and Diesel Cars<\/h3>\n<p>The most significant VED changes affect the first year\u2019s tax, known as the \u2018showroom tax,\u2019 (Expensive Cars Supplement tax) calculated based on CO2 emissions. Cars emitting 1-50 g\/km of CO2 will see first-year tax jump from \u00a310 to \u00a3110, 51-75 g\/km to \u00a3130, and all other rates for vehicles emitting 76 g\/km or more will double.  The second-year rate for petrol and diesel cars will remain \u00a3190 per year.<\/p>\n<h3 class=\"wp-block-heading\">Electric Cars<\/h3>\n<p>From April 2025, electric vehicles (EVs) will no longer be exempt from road tax. In the first year, EVs will incur a \u00a310 charge. From the second year onward, cars registered after April 1, 2017, will pay an annual flat rate of \u00a3195, and those registered before April 1, 2017, will pay \u00a320 annually. EVs priced above \u00a340,000 will now be subject to \u2018showroom\u2019 tax annually between the second and sixth years of ownership.<\/p>\n<h3 class=\"wp-block-heading\">Hybrid Cars<\/h3>\n<p>Hybrids registered on or after April 1, 2017, will lose their \u00a310 annual VED discount starting in 2025, paying the standard flat rate of \u00a3195 per year, in line with petrol and diesel cars. Hybrids registered before 2017 will continue to be taxed based on CO2 emissions under the older system.\u00a0<\/p>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/car-tax-reminder-scaled.webp\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"671\" src=\"https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/car-tax-reminder-1024x671.webp\" alt=\"\" class=\"wp-image-62295\" srcset=\"https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/car-tax-reminder-1024x671.webp 1024w, https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/car-tax-reminder-300x197.webp 300w, https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/car-tax-reminder-768x503.webp 768w, https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/car-tax-reminder-1536x1006.webp 1536w, https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/car-tax-reminder-scaled.webp 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><\/a><\/figure>\n<h2 class=\"wp-block-heading\" id=\"Autumn-budget:-What's-changing-for-your-car-tax-in-2025\">Autumn budget: What\u2019s changing for your car tax in 2025<\/h2>\n<p>Here\u2019s an overview of the key changes, which will take place from 1 April 2025:<\/p>\n<ul class=\"wp-block-list\">\n<li><strong>Electric cars are no longer tax exempt:<\/strong> zero-emissions cars registered from 1 April 2025 will pay \u00a310 in first year VED (\u201croad tax\u201d), then \u00a3195 for every year after that<\/li>\n<li><strong>Electric cars now have to pay the \u2018showroom tax\u2019 too:<\/strong> cars with an RRP above \u00a340,000 have to pay an additional \u00a3410 per year on top of VED payments for the first five years after it\u2019s registered, known as Expensive Cars Supplement tax (ECS). EVs were previously exempt, but this will change in April 2025<\/li>\n<li><strong>There will be VED hikes for petrol, diesel and hybrid cars:<\/strong> Any car with CO2 emissions between 1-50g\/km (essentially most plug-in hybrids) will jump from \u00a310 in the first year to \u00a3110. Similarly, cars in the 51-75g\/km band jump from \u00a330 to \u00a3130. And anything that emits 75g\/km or more will see the first-year rate double.<\/li>\n<li><strong>Benefit-in-kind rate (Company car tax) will increase for all vehicle types:<\/strong>\n<ul class=\"wp-block-list\">\n<li>For EVs, it will increase by 1% each year from 2025 to 2028 (currently at 2%)<\/li>\n<li>Vehicles producing 75g\/km of CO2 or more will see a 1% BIK rate increase in April 2025, remaining constant until at least 2028.<\/li>\n<li>The percentage scale based on CO2 emissions will still apply, with a maximum BIK rate of 37% for high-emission vehicles (over 170g\/km). <\/li>\n<\/ul>\n<\/li>\n<li><strong>CO2-based tax means it\u2019s still much cheaper to run an EV<\/strong><\/li>\n<\/ul>\n<h3 class=\"wp-block-heading\">First-Year Road Tax VED for New Cars<\/h3>\n<p>The first-year road tax VED for new cars is a one-time payment made when a new vehicle is registered. This rate is determined by the vehicle\u2019s CO2 emissions and fuel type, making it a crucial factor for new car buyers to consider. Starting from April 2025, the first-year rates will range significantly, from as low as \u00a310 for electric vehicles (EVs) to a hefty \u00a35,490 for high-polluting cars.<\/p>\n<p>For petrol and diesel cars, the rates have seen a substantial increase, effectively doubling. For instance, cars with emissions between 76-90g\/km will now face a first-year road tax of \u00a3270. Hybrid cars, which are often seen as a middle ground between traditional and electric vehicles, will also see changes. Hybrids with emissions between 1-50g\/km will pay \u00a3110, while those with emissions between 51-75g\/km will be taxed at \u00a3130.<\/p>\n<p>These changes underscore the government\u2019s push towards reducing emissions and promoting cleaner alternatives. Whether you\u2019re considering a petrol, diesel, or hybrid vehicle, it\u2019s essential to factor in these new first-year VED rates when making your purchase decision.<\/p>\n<h3 class=\"wp-block-heading\">Standard Rate Car Tax for New Cars<\/h3>\n<p>Once the first year is over, the standard rate car tax for new cars kicks in, applying from the second year of registration onwards. This rate is primarily based on the vehicle\u2019s fuel type and CO2 emissions, ensuring that ongoing costs reflect the environmental impact of the vehicle.<\/p>\n<p>For cars registered from April 2017, the standard rate is set at \u00a3190 for petrol and diesel cars. Hybrid cars, which offer a blend of traditional and electric power, benefit from a slight discount, paying \u00a310 less annually. Electric vehicles, which were previously exempt, will now also pay the standard rate of \u00a3190 from the second year of registration.<\/p>\n<p>Additionally, there\u2019s an extra charge for cars with a list price over \u00a340,000, known as the expensive car supplement. This supplement adds \u00a3410 to the annual tax bill for the first five years after the car is registered. This measure aims to balance the scales, ensuring that more expensive and potentially higher-polluting vehicles contribute more towards road maintenance and environmental initiatives.<\/p>\n<h2 class=\"wp-block-heading\" id=\"Car-tax-bands-explained\">Car tax bands explained <\/h2>\n<p>Vehicle tax bands are based either on engine size, or fuel type and carbon dioxide (CO2 emissions), depending on when the vehicle was first registered.<\/p>\n<p>In order to tax a vehicle, it must have suitable car insurance cover and a valid MOT if it is over three years old (four years in Northern Ireland). Both are checked electronically when you apply for car tax.<\/p>\n<h2 class=\"wp-block-heading\" id=\"How-do-I-find-out-the-tax-band-for-my-car?\">How do I find out the tax band for my car?<\/h2>\n<p>To determine your car\u2019s tax band, you\u2019ll need to know the year it was registered. Check the V5C logbook for your vehicle and locate the date of first registration on the first page. With the registration year in hand, you can then identify the specific tax band and annual cost for your vehicle.<\/p>\n<h3 class=\"wp-block-heading\">Tax bands for cars registered before 1 March 2001<\/h3>\n<p>Vehicles registered prior to 1 March 2001 are categorized as Private\/Light Goods (PLG) vehicles, or private motor cars or goods vehicles with a maximum revenue weight of 3,500kg. There are two categories, based on engine size:<\/p>\n<figure class=\"wp-block-table\">\n<table class=\"has-fixed-layout\">\n<thead>\n<tr>\n<th>PLG Tax Class 11<\/th>\n<th>Current annual tax rate <\/th>\n<th>Annual tax rate from 1 April 2025<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Not over 1549cc<\/td>\n<td>\u00a3210<\/td>\n<td>\u00a3220<\/td>\n<\/tr>\n<tr>\n<td>Over 1549cc<\/td>\n<td>\u00a3345<\/td>\n<td>\u00a3375<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<h3 class=\"wp-block-heading\">Tax bands for cars registered between March 2001 and April 2017<\/h3>\n<p>Vehicles registered between March 2001 and April 2017 fall into one of 13 VED tax bands based on their CO2 emissions. Essentially, lower CO2 emissions result in a lower tax band.<\/p>\n<p>Currently, vehicles with CO2 emissions below 100g\/km are exempt from road tax; however, <strong>this will change in 2025 when cars in Band A will be moved into Band B.<\/strong><\/p>\n<p>The road tax for petrol and diesel vehicles registered during this period is more or less the same.<\/p>\n<p>For alternative-fuel vehicles, like hybrids, plug-in hybrids, and those running on LPG, CNG, or biofuel, the VED is \u00a310 less compared to standard petrol or diesel vehicles.<\/p>\n<figure class=\"wp-block-table\">\n<table class=\"has-fixed-layout\">\n<thead>\n<tr>\n<th>VED band<\/th>\n<th>CO2 emissions<\/th>\n<th>Annual tax rate<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>A<\/td>\n<td>Up to 100g\/km<\/td>\n<td>\u00a30<\/td>\n<\/tr>\n<tr>\n<td>B<\/td>\n<td>101-110g\/km<\/td>\n<td>\u00a320<\/td>\n<\/tr>\n<tr>\n<td>C<\/td>\n<td>111-120g\/km<\/td>\n<td>\u00a335<\/td>\n<\/tr>\n<tr>\n<td>D<\/td>\n<td>121-130g\/km<\/td>\n<td>\u00a3160<\/td>\n<\/tr>\n<tr>\n<td>E<\/td>\n<td>131-140g\/km<\/td>\n<td>\u00a3190<\/td>\n<\/tr>\n<tr>\n<td>F<\/td>\n<td>141-150g\/km<\/td>\n<td>\u00a3210<\/td>\n<\/tr>\n<tr>\n<td>G<\/td>\n<td>151-165g\/km<\/td>\n<td>\u00a3255<\/td>\n<\/tr>\n<tr>\n<td>H<\/td>\n<td>166-175g\/km<\/td>\n<td>\u00a3305<\/td>\n<\/tr>\n<tr>\n<td>I<\/td>\n<td>176-185g\/km<\/td>\n<td>\u00a3335<\/td>\n<\/tr>\n<tr>\n<td>J<\/td>\n<td>186-200g\/km<\/td>\n<td>\u00a3385<\/td>\n<\/tr>\n<tr>\n<td>K<\/td>\n<td>201-225g\/km<\/td>\n<td>\u00a3415<\/td>\n<\/tr>\n<tr>\n<td>L<\/td>\n<td>226-255g\/km<\/td>\n<td>\u00a3710<\/td>\n<\/tr>\n<tr>\n<td>M<\/td>\n<td>Over 255g\/km<\/td>\n<td>\u00a3735<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<h3 class=\"wp-block-heading\">Tax bands for cars registered after April 2017<\/h3>\n<p>Below you can find a comparison between the current tax rates and the new tax rates set to come into force from 1 April 2025. As you can see, zero-emission vehicles (band A) will have to pay \u00a310 in first year VED, then \u00a3195 for every year after that:<\/p>\n<figure class=\"wp-block-table\">\n<table class=\"has-fixed-layout\">\n<thead>\n<tr>\n<th>VED Band<\/th>\n<th>CO2 emissions (g\/km)<\/th>\n<th>First year tax rates<br \/>2024 \u2013 2025<\/th>\n<th>First year tax rates<br \/>2025 \u2013 2026<\/th>\n<th>Standard tax rates<br \/>2024 \u2013 2025<\/th>\n<th>Standard tax rates<br \/>2025 \u2013 2026<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>A<\/td>\n<td>0g\/km<\/td>\n<td>\u00a30<\/td>\n<td>\u00a310<\/td>\n<td>\u00a30<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>B<\/td>\n<td>1 \u2013 50<\/td>\n<td>\u00a310<\/td>\n<td>\u00a3110<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>C<\/td>\n<td>51 \u2013 75<\/td>\n<td>\u00a330<\/td>\n<td>\u00a3130<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>D<\/td>\n<td>76 \u2013 90<\/td>\n<td>\u00a3135<\/td>\n<td>\u00a3270<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>E<\/td>\n<td>91 \u2013 100<\/td>\n<td>\u00a3175<\/td>\n<td>\u00a3350<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>F<\/td>\n<td>101 \u2013 110<\/td>\n<td>\u00a3195<\/td>\n<td>\u00a3390<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>G<\/td>\n<td>111 \u2013 130<\/td>\n<td>\u00a3220<\/td>\n<td>\u00a3440<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>H<\/td>\n<td>131 \u2013 150<\/td>\n<td>\u00a3270<\/td>\n<td>\u00a3540<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>I<\/td>\n<td>151 \u2013 170<\/td>\n<td>\u00a3680<\/td>\n<td>\u00a31,360<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>J<\/td>\n<td>171 \u2013 190<\/td>\n<td>\u00a31,095<\/td>\n<td>\u00a32,190<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>K<\/td>\n<td>191 \u2013 225<\/td>\n<td>\u00a31,650<\/td>\n<td>\u00a33,300<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>L<\/td>\n<td>226 \u2013 255<\/td>\n<td>\u00a32,340<\/td>\n<td>\u00a34,680<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<tr>\n<td>M<\/td>\n<td>Over 255<\/td>\n<td>\u00a32,745<\/td>\n<td>\u00a35,490<\/td>\n<td>\u00a3190<\/td>\n<td>\u00a3195<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/Charging-EV-scaled.webp\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/Charging-EV-1024x683.webp\" alt=\"\" class=\"wp-image-62296\" srcset=\"https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/Charging-EV-1024x683.webp 1024w, https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/Charging-EV-300x200.webp 300w, https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/Charging-EV-768x512.webp 768w, https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/Charging-EV-1536x1024.webp 1536w, https:\/\/blog.howdeninsurance.co.uk\/wp-content\/uploads\/2025\/02\/Charging-EV-scaled.webp 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><\/a><\/figure>\n<h2 class=\"wp-block-heading\" id=\"What-cars-are-exempt-from-road-tax?\">What cars are exempt from road tax?<\/h2>\n<p>Some vehicles will continue to remain exampt from road tax. This includes:<\/p>\n<ul class=\"wp-block-list\">\n<li>Classic cars over 40 years old<\/li>\n<li>Vehicles used by disabled drivers <\/li>\n<li>Vehicles used to transport disabled passengers <\/li>\n<li>Mobility scooters, powered wheelchairs and invalid carriages<\/li>\n<li>Vehicles used just for agriculture, horticulture, and forestry e.g. tractors<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\" id=\"How-do-I-pay-my-car-tax?\">How do I pay my car tax?<\/h2>\n<p>The simplest way to pay for road tax is online.<\/p>\n<p>To do so, you\u2019ll need a reference number from one of the following documents:<\/p>\n<ul class=\"wp-block-list\">\n<li>A recent reminder (V11) \u2018last chance\u2019 warning letter from the DVLA<\/li>\n<li>Vehicle logbook (V5C) in your name<\/li>\n<li>A green, new keeper supplement (V5C\/2) from a recently purchased car\u2019s logbook.<\/li>\n<\/ul>\n<p>The online system is very user-friendly, and you can pay with a debit card, credit card, or direct debit. Note that additional charges may apply for direct debit payments.<\/p>\n<p>If you prefer not to pay online, you can call the <strong>DVLA\u2019s 24-hour service at 0300 123 4321<\/strong>, although direct debit is not an option over the phone.<\/p>\n<p>Alternatively, you can tax your vehicle in person at a Post Office that handles vehicle tax.<\/p>\n<h2 class=\"wp-block-heading\" id=\"When-do-I-have-to-pay-my-car-tax?\">When do I have to pay my car tax?<\/h2>\n<p>If you own a vehicle, you will automatically receive a reminder before the tax is due to expire, which is always at the end of a given month.<\/p>\n<p>Essentially, if your vehicle is taxed for 12 months from 1 January, you\u2019ll need to renew before the end of December. You can tax a car for either six or 12 months.<\/p>\n<h2 class=\"wp-block-heading\" id=\"What-happens-if-I-don't-tax-my-car?\">What happens if I don\u2019t tax my car?<\/h2>\n<p>If you are the registered keeper of an untaxed vehicle, you will receive a Late Licensing Penalty (LLP) letter. The fine is \u00a380 but can be reduced to \u00a340 if paid within 33 days. Failure to pay will result in the case being handed over to a debt collection agency.<\/p>\n<p>Anyone found using or keeping an untaxed vehicle without a SORN (Statutory Off Road Notification)* will receive an Out of Court Settlement (OCS) letter.<\/p>\n<p>The OCS amount is \u00a330 plus one-and-a-half times the outstanding vehicle tax. If this remains unpaid, the case may be taken to a magistrates\u2019 court, where penalties can be \u00a31,000 or five times the amount owed, whichever is higher. This penalty rises to \u00a32,500 if you are caught using or keeping an untaxed vehicle on a public road with a SORN in place.<\/p>\n<p>In both scenarios, the vehicle may be clamped, and a \u00a3100 clamp release fee must be paid within 24 hours.<\/p>\n<p>If the vehicle is removed, the fee increases to \u00a3200, with an additional \u00a321 per day storage fee starting from the day it is taken to the vehicle pound.<\/p>\n<p>Driving without car tax can lead to severe consequences, including fines up to \u00a31,000. The police now use Automatic Number Plate Recognition (ANPR) cameras to check if a car is taxed since the tax disc is no longer in use.<\/p>\n<p>*You need to declare a SORN when taking a vehicle \u2018off the road\u2019 to stop taxing and insuring it.<\/p>\n<h2 class=\"wp-block-heading\" id=\"Quickfire-summary:-Car-tax-changes-in-2025\">Quickfire summary: UK car tax changes in 2025<\/h2>\n<ul class=\"wp-block-list\">\n<li>Significant tax increases have been announced by Chancellor Rachel Reeves as a part of the Autumn budget for 2025, set to take place from 1 April onwards.<\/li>\n<li><strong>Vehicle Excise Duty (VED)<\/strong> \u2013 also known as car tax or road tax \u2013 is an annual tax that vehicle owners in the UK must pay to legally drive on public roads. <\/li>\n<li><strong>To determine your car\u2019s tax band<\/strong>, check the V5C logbook for your vehicle and locate the date of first registration on the first page.<\/li>\n<li><strong>Vehicle Tax Bands:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Cars registered after March 1, 2001: VED based on CO2 emissions, split into bands A (lowest) to M (highest).<\/li>\n<li>Cars registered before March 1, 2001: VED based on engine size<\/li>\n<\/ul>\n<\/li>\n<li><strong>Electric Vehicles (EVs):<\/strong>\n<ul class=\"wp-block-list\">\n<li>No longer tax-exempt from April 2025.<\/li>\n<li>First-year charge: \u00a310.<\/li>\n<li>Annual flat rate: \u00a3195 from the second year onward.<\/li>\n<li>EVs over \u00a340,000: Additional \u00a3410 \u2018showroom tax\u2019 annually for the first five years.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Petrol and Diesel Cars:<\/strong>\n<ul class=\"wp-block-list\">\n<li>CO2 emissions 1-50 g\/km: First-year tax from \u00a310 to \u00a3110.<\/li>\n<li>CO2 emissions 51-75 g\/km: First-year tax from \u00a330 to \u00a3130.<\/li>\n<li>Vehicles emitting 76 g\/km or more: First-year rates double.<\/li>\n<li>Second-year rate remains at \u00a3190 annually.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Hybrids:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Registered after April 1, 2017: Lose \u00a310 annual VED discount, paying \u00a3195 per year.<\/li>\n<li>Registered before 2017: Taxed based on CO2 emissions under older system.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Benefit-in-Kind (BiK) Rates:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Increase by 1% each year from 2025 to 2028 for EVs.<\/li>\n<li>Vehicles producing 75g\/km of CO2 or more: 1% BiK increase from April 2025, remaining constant until at least 2028.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Car Tax Rates Comparison (April 2025):<\/strong>\n<ul class=\"wp-block-list\">\n<li>0 g\/km: \u00a310 (first year), \u00a3195 (standard).<\/li>\n<li>1-50 g\/km: \u00a3110 (first year), \u00a3195 (standard).<\/li>\n<li>51-75 g\/km: \u00a3130 (first year), \u00a3195 (standard).<\/li>\n<li>Over 255 g\/km: \u00a35,490 (first year), \u00a3195 (standard).<\/li>\n<\/ul>\n<\/li>\n<li><strong>Exemptions:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Classic cars over 40 years old.<\/li>\n<li>Vehicles used by disabled drivers or to transport disabled passengers.<\/li>\n<li>Mobility scooters, powered wheelchairs, invalid carriages.<\/li>\n<li>Vehicles for agriculture, horticulture, forestry (e.g., tractors).<\/li>\n<\/ul>\n<\/li>\n<li><strong>How to Pay Car Tax:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Easiest way: Online using a reference number from V11, V5C, or V5C\/2.<\/li>\n<li>Alternative methods: DVLA\u2019s 24-hour phone service (0300 123 4321) or in person at a Post Office.<\/li>\n<\/ul>\n<\/li>\n<li><strong>When to Pay Car Tax:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Reminders are sent before tax expires (end of the month).<\/li>\n<li>Tax can be paid for six or 12 months.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Penalties for Not Paying Car Tax:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Late Licensing Penalty (LLP): \u00a380 (reduced to \u00a340 if paid within 33 days).<\/li>\n<li>Out of Court Settlement (OCS): \u00a330 plus 1.5 times the outstanding tax.<\/li>\n<li>Non-payment can lead to court action, fines up to \u00a31,000 or higher, vehicle clamping, and additional fees for removal and storage.<\/li>\n<li>ANPR cameras used to check car tax compliance.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Sources:<\/strong> RAC, Autotrader, Regit <\/p>\n<h3 class=\"wp-block-heading\">Also read:<\/h3>\n<h3 class=\"wp-block-heading\"><strong>Our motor insurance products:<\/strong><\/h3>\n<p><!-- Simple Share Buttons Adder (8.5.2) simplesharebuttons.com -->\t\t<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Driving is about to get more expensive in 2025, and not just for petrol and diesel vehicles; owners of electric vehicles (EVs) will be hit too. As part of her Autumn budget, chancellor Rachel Reeves has announced significant tax increases, with motorists set to feel the blow. Tax rates can be confusing, especially when it [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":72995,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[94],"tags":[1075,7356],"dealstore":[],"offerexpiration":[],"class_list":["post-72994","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insurance","tag-car","tag-tax"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>UK car tax changes 2025: what you need to know - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=72994\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UK car tax changes 2025: what you need to know - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Driving is about to get more expensive in 2025, and not just for petrol and diesel vehicles; owners of electric vehicles (EVs) will be hit too. 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