You’ve probably seen the scaremongering headlines warning that drivers face a ‘significant hit’ (thank you Daily Express) come April Fools Day when new road tax regulations come into play, but what is the truth about the VED rise and how will it affect classic and modern classic owners?
The biggest impact will be for anyone buying brand new from the showrooms – even those opting for an electric vehicle, who will now have to pay a tenner instead of getting away scott free.
It’s the most expensive and highest-polluting cars which will be hammered thanks to a doubling of VED for cars emitting more than 75g of CO2 per km. At the highest level (above 255g/km) buyers will have to pay a whopping £5,490 in the first year.
What’s more, there’s a so-called “luxury car supplement” charged for cars with a list price above £40,000. That’s payable for the next four years and comes in at £450 for a petrol or diesel, £440 for an alternative-fueled car, and £310 for EVs. Oh, and that’s on top of a new standard rate of £190 for petrol or diesel cars and £180 for alternative fueled vehicles. Zero emissions EVs have a standard rate of £10. You can find the full list of vehicle tax rates here.
For older cars, including modern classics registered between 1 March 2001 and 31 March 2017 the system is still based on emissions, and those emitting less than 100g/km will still pay nothing, while for everybody else there’s a £10 increase compared to 2024. That means owners of older cars emitting more than 255g/km of CO2 will pay £735 a year for the privilege of driving on Britain’s beautifully-maintained road network. Ahem.
Cars registered before 1 March 2001, that were still younger than 40 years old on 1 January 2025, are charged based on engine capacity. That’s £210 a year for those under 1,549cc and £345 for anything above.
The Government considers any car older than those to be a “historic vehicle” and is therefore exempt from paying road tax, or, indeed, being required to have an annual MOT test. You can find out how to apply here. It’s literally the only time, as the owner of a 1982 Lotus Esprit that I actually save money.
An Historic vehicle has no tax and no depreciation if its looked after. As for everyday transport my old mini tax is £20pa and its diesel happy to spend to keep that on the road at 60mpg
CO2 is not actually “pollution”.
I can forsee the courts being buisy with those on limited income due to inability or unwillingness to pay exorbant road tax . another Labour rip off
Of course CO2 is pollution. Putting anything into the environment which shouldn’t be there is pollution, and that includes anything which unbalances the naturally occurring ratios of materials which already occur, but in much smaller quantities. Claiming CO2 isn’t a pollutant is simply closet climate denying.
A useful hint: if your tax is due in the next couple of months and you are facing a big hike, get out your logbook and go onto the gov.uk website now and it’ll let you retax it from 1st March at the old rates. You may lose a month or two, but still worthwhile. Particularly if you drive an EV which is a couple of years where tax is going from zero to something like £180 (yes, even avid historic vehicle enthusiasts can enjoy the great positives of an EV)!!
This country is finished. If I have a Ford Fiesta from 2004 means that I don’t have money to buy a better one. How can I afford then to pay double the tax as a self employed person? How can I work if I will not have a car to go to different jobs.
Road fund license is a joke in the UK. It’s totally unfair and excessively over complicated. It makes you wonder just how many people are employed within the DVLA to run the RFL department?
Surely, the simplest option would be to go back to just one realistic flat fee for ALL cars, none of this emissions nonsense, or value or engine size.
Staffing levels could then be reduced as the system could easily be fully automated to run on a daily basis, not just complete months? So if you sell and buy a used car in the middle of a month, you’ll pay double the RFL because you’d have already paid the full month on your old car and the new owner (if it’s sold straightaway) will also have to pay for the same month, then you’ve got to pay a full month for the newer car, but the previous owner has already paid for that month, resulting in DVLA doubling their RFL income as no refund is given on incomplete months – just another government backed scam?
EV’s paying a tenner is an insult to the rest of us having to shell out £hundreds, they are heavier than your average similar sized ICE car, so should at least be paying the same.
Better still, scrap the RFL system in its entirety, which would negate the need for the RFL department and save a significant sum for taxpayers. It’s an outdated flawed system that needs to be totally reformed or scrapped.
We already pay way more than enough tax on fuel as it is. And those doing more mileage are already paying more!
Abolish Road Tax and put it on the price of what ever fuel you use then nobody will be chased by Police freeing them up to deal with real crimes and make a fairer system the more you drive on the road the more you pay for up keep of the roads then older people who use their cars just for shopping and doctors / hospital appointments because most pensioners are struggling to pay and there is no real alternative as bus services are a joke
I dislike the add on tax for higher value new cars. No justification for it other than ripping off those probably paying more tax anyway😡
Yes everyone voted for change assuming it would be better
Had the bank K cap that was in place for many years for cars registered before March 2006 now been removed? This isn’t clear or discussed anywhere.
Thanks
Thank you for a rational and pragmatic explanation of the situation. There seem to be fewer and fewer people capable of being so!
I suppose that it was inevitable, well just have to put up with it. I agree with taxing electric vehicles, why should they be tax free?