Major fixed cost increase for millions of motorists following DVSA change

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Millions of drivers with gas-guzzling cars are about to feel the pain from a tax increase; some may have to pay an additional £140 just to use their car.

In the Spring Budget, the Chancellor declared that the Vehicle Excise Duty (VED), often known as the road tax or car tax, will be raised by the DVLA in accordance with inflation. This implies that a lot of car owners should now anticipate annual tax increases.

While the VED paid on brand-new cars with high emissions is increasing by £140 to £2,745 for the vehicle’s first year – but this will only apply to the most polluting new vehicles – cars constructed after 2017 will see a £10 increase in their flat annual rate starting today.

Age, fuel type, and the amount of carbon emissions per km are taken into account when calculating vehicle emissions dependency on emissions (VED). Older, less polluting cars pay no VED at all, whereas brand-new, gas-guzzlers must pay thousands just to be allowed to drive. As they have been for many years, electric vehicles are currently exempt from this charge; nevertheless, the Chancellor has announced that starting in April 2025, they will be required to pay.

The only vehicles on British roads that are not subject to an annual VED rise commensurate with inflation are those that were manufactured between 2007 and 2017. These vehicles pay tax solely on the basis of their emissions, not the type of petrol they run. Due to their low CO2 emissions, many diesel vehicles between the ages of seven and seventeen must pay to enter Ultra Low Emission Zones (ULEZ), although their VED will be little or nonexistent.

The costly Car Supplement, which is being added to the sale of all cars over £40,000, will increase by £20 to £410. This is in addition to the road tax increases that drivers are already facing. Additionally, anyone purchasing an exceptionally costly car should budget for additional costs.

VED tax bands for first-year cars from April 1

CO2 emissions g/kmVED rate
1 to 50£10
51 to 75£30
76 to 90£135
91 to 100£175
101 to 110£195
11 to 130£220
131 to 150£270
151 to 170£680
171 to 190£1,095
191 to 225£1,650
226 to 255£2,340
Over 255£2,745

VED rates for cars registered between March 1, 2001 and March 31, 2007

VED bandCO2 emissions g/kmAnnual rate
AUp to 100£0
B101 to 110£20
C111 to 120£35
D121 to 130£160
E131 to 140£190
F141 to 150£210
G151 to 165£255
H166 to 175£305
I176 to 185£335
J186 to 200£385
K201 to 225£415
L226 to 255£710
MOver 255£735

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