Your Guide to Understanding the Changes to Car Tax in 2025

Vehicle Excise Duty (VED) changes for brand new cars from April 2025

Understanding Vehicle Excise Duty (VED), commonly known as car tax, is essential for UK drivers. In the Autumn budget, the Government announced plans to change the tax bands for brand new cars registered from April 2025 onwards. Although this change only affects the first year of registration, there are substantial increases for some vehicles. In addition, Battery Electric Vehicles will no longer be exempt from VED charges and the annual £10 discount for alternatively fuelled vehicles will be removed.

How much car tax will I pay?

Vehicle Excise Duty (VED) rates are determined by factors such as a vehicle's CO₂ emissions, engine size, and fuel type. Under the current system, which has been in place since 1st April 2017, vehicles are divided into 13 bands based on their CO₂ emissions for the first year of registration. From the second year onward a three-band system applies, consisting of zero, standard, and premium rates. Here's a breakdown of how the changes will affect the current system:

1st Year VED Rate Changes 2024 vs 2025

CO2 Emissions (g/km)	2024 VED (Petrol & Diesel)	2024 VED (AFV)	2025 VED	VED Rate Change
0	£0	£0	£10	+£10
1-50	£10	£0	£110	+£110
51-75	£30	£20	£130	+£110
76-90	£135	£125	£270	+£145
91-100	£175	£165	£350	+£185
101-110	£195	£185	£390	+£205
111-130	£220	£210	£440	+£230
131-150	£270	£260	£540	+£280
151-170	£680	£670	£1,360	+£690
171-190	£1,095	£1,085	£2,190	+£1,105
191-225	£1,650	£1,640	£3,300	+£1,660
226-255	£2,340	£2,330	£4,680	+£2,350
Over 255	£2,745	£2,735	£5,490	+£2,755

VED Rates for Cars Registered After 1 April 2017 will increase in line with inflation from April 2025. This applies from the second year of vehicle registration onwards.

Standard Rate: £195 annually (an increase from £190).
Additional Premium Rate: A higher rate of £620 applies to vehicles with a list price exceeding £40,000 when new (an increase from £600). This is paid for 5 years until the 7th year of registration.
Electric Vehicles (EVs): The standard rate will apply to BEV vehicles from April 2025

VED Rates for Cars Registered Between 1 March 2001 and 31 March 2017:

For vehicles first registered between 1st March 2001 and 31st March 31 2017, rates are divided by CO₂ emission bands, with lower tailpipe emissions resulting in lower vehicle tax. Click here to check the rate for tax for your vehicle.

VED Rates for Cars Registered Before 1 March 2001:

For vehicles registered before this date, VED is determined by engine size: Up to 1549cc, or Over 1549cc. Click here to check the rate of tax for your vehicle.

I'm planning on buying a new car this year, how will this affect me?

So, if you're planning on buying a brand new car, now really is the time to buy! Contact your local Vantage centre today to avoid disappointment (and the road tax (VED) increase).

Get in touch for help with VED changes

Find a new car to beat the VED increase

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