From April 2025, drivers of petrol, diesel, and hybrid cars will face significant increases in first-year Vehicle Excise Duty (VED), with some models seeing tax rates double. A total of 60 car models from 24 manufacturers will be affected, with some new car buyers facing a £2,745 tax bill when registering their vehicles.
The increase was announced in the Autumn Budget as part of the government’s strategy to encourage the transition to electric vehicles while discouraging the purchase of high-emission internal combustion engine cars. Under the revised system, tax rates will be based on a vehicle’s CO2 emissions, with those producing over 255g/km facing the highest charges.
Why is Car Tax Increasing?
According to Lancs Live, the upcoming VED changes are designed to make electric vehicles more attractive by widening the tax gap between zero-emission and high-emission vehicles. During her Budget statement, Chancellor Rachel Reeves explained the government’s stance, saying:
“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.”
Currently, electric vehicles do not incur any first-year VED fees, but from April 2025, new EV buyers will be required to pay a nominal £10 first-year VED charge. Meanwhile, first-year tax rates for petrol, diesel, and hybrid cars will see significant increases, with some models paying over £5,000 in tax at the point of purchase.
Which Cars Are Affected?
The tax increase primarily affects high-emission vehicles, particularly those producing over 255g/km of CO2. These vehicles will face the highest first-year VED charge of £2,745, making them significantly more expensive to purchase.
Here is the full list of affected models, sorted alphabetically by manufacturer:
- Alfa Romeo Stelvio 2.9 V6 Bi-Turbo
- Aston Martin DB12 4.0 V8
- Aston Martin DBX 4.0 V8
- Aston Martin Vantage 4.0 V8
- Audi R8 5.2 FSI V10
- Audi RS6 4.0 TFSI V8
- Audi RS7 4.0 TFSI V8
- Audi RSQ8 4.0 TFSI V8
- Audi S8 4.0 TFSI V8
- Audi SQ7 4.0 TFSI V8
- Audi SQ8 4.0 TFSI V8
- Bentley Bentayga 4.0 V8
- Bentley Continental 4.0 V8
- Bentley Continental 6.0 W12
- Bentley Flying Spur 4.0 V8
- BMW Alpina XB7 4.4 V8
- BMW M8 4.4 V8
- BMW X5 M 4.4 V8
- BMW X6 M 4.4 V8
- BMW X7 M 4.4 V8
- Chevrolet Corvette Stingray 6.2 V8
- Ferrari Purosangue 6.5 V12
- Ferrari Roma 3.8T V8
- Ford Mustang 5.0 V8
- Ford Ranger 2.0 TD EcoBlue
- Ford Ranger 3.0 EcoBlue
- Ford Ranger 3.0 V6
- INEOS Grenadier 3.0P
- Jaguar F-Pace 5.0 P575 V8
- Jeep Wrangler 2.0 GME
- Lamborghini Huracan 5.2 V10
- Lamborghini Revuelto 6.5 V12
- Lamborghini Urus 4.0 V8 BiTurbo
- Land Rover Defender 90 5.0 P425 V8
- Land Rover Defender 110 5.0 P425 V8
- Lotus Emira 3.5 V6
- Maserati Levante 3.0 V6
- Maserati Levante 3.8 V8
- Maserati MC20 3.0 V6
- McLaren GT 4.0T V8
- Mercedes-Benz AMG GT 4.0 V8
- Mercedes-Benz G63
- Mercedes-Benz G400D
- Mercedes-Benz GLE63
- Mercedes-Benz GLS63h
- Mercedes-Benz SL55
- Porsche 718 Cayman 4.0 GT4
- Porsche 911 3.7T 992 Turbo
- Porsche Cayenne 4.0T V8
- Porsche Macan 2.9T V6
- Range Rover 4.4 P530 V8
- Range Rover 4.4 P615 V8
- Range Rover Sport 4.4P V8
- Rolls-Royce Cullinan 6.75 V12
- Rolls-Royce Ghost 6.75 V12
- Toyota Hilux 2.8D
- Toyota Land Cruiser 2.8D
- Volkswagen Amarok 3.0 TDI
How Much More Will Drivers Pay?
Under the new system, the first-year tax rate is based on a car’s CO2 emissions, with the highest polluting vehicles seeing the biggest increases. For example:
- A Ford Puma will see its first-year VED rise from £220 to £440.
- A Range Rover will jump from £2,745 to £5,490.
- A Mercedes-Benz AMG GT will see similar increases, with high-performance models being particularly affected.
These changes will add a significant upfront cost for new car buyers, making petrol and diesel cars more expensive compared to electric alternatives.
