Owners of older vehicles must take note of the upcoming changes to Vehicle Excise Duty rates, set to increase starting next month. The adjustments will impact cars manufactured before 2001 and those between 2001 and 2017.
Under the updated regulations, cars produced between 1985 and 2001 will see an escalation in VED charges based on engine size. Vehicles with engines exceeding 1549cc will now face a fee of £360 for road usage, up from the previous £345.
For cars registered from March 1st, 2001, to March 31st, 2017, there will be a rise in VED payments. These vehicles are categorized into emissions bands, with costs increasing across all segments. Models emitting over 255g/km of CO2 will experience an additional charge of up to £25.
Newer vehicles registered after 2017 will be subjected to the standard road tax rate of £195, up from £190. Moreover, the expensive car supplement will also see an increase to £425 annually, previously at £410. This adjustment applies to vehicles valued over £40,000 when new, for the second to sixth year of ownership.
However, classic cars registered before 1985 will remain exempt from any charges due to the historic vehicle tax exemption.
HM Revenue and Customs confirmed that these changes constitute a routine uprating process set to commence from the beginning of the following month. The adjustments will align the Vehicle Excise Duty standard rates for cars, vans, motorcycles, and motorcycle trade licenses with the Retail Price Index. Additionally, the update will incorporate zero-emission vehicles into Vehicle Excise Duty starting from April 1, 2025.
From April 1, 2025, owners of electric, zero, or low-emission vehicles will face a minimal first-year tax rate of £10, followed by the standard rate of £195 thereafter. Vehicles registered between April 1, 2017, and March 31, 2025, will continue to be charged at the standard £195 rate.