Drivers have highlighted how the current system of car tax changes is complicated for motorists, especially in the lead-up to major car tax changes which could see Britons charged thousands of pounds extra.
As unveiled during the Autumn Budget, Chancellor Rachel Reeves said the Government would be supporting the purchase of new electric vehicles through car tax measures to put drivers off from buying new petrol and diesel cars.
The new changes are being rolled out on April 1, 2025, to help meet net zero targets of banning the sale of new petrol and diesel cars and vans by the end of the decade.
Motoring expert Maria McCarthy spoke to BBC Radio Foyle about the changes that had come in since the start of the millennium and how the system had changed from having limited categories to now focusing on age and emissions output.
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New car tax changes will be introduced in April this year
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Host Daire Ní Chanáin admitted that despite driving for 10 years, she struggled to get to grips with understanding Vehicle Excise Duty.
In response, McCarthy said: “When I started, it was pre-2001 so it was just, you either pay the £180 or £230 so that was it. It was really simple.
“Whereas now, there’s all these different layers and it’s to do with whether you’ve got a new car and there’s the showroom tax.
“Quite frankly, as I say, if you’re out there and you’re feeling bewildered by car tax, I have spent a significant amount of time this morning, and I do this for my job.”
From April, all Vehicle Excise Duty rates for cars, vans and motorcycles, will be uprated in line with the Retail Price Index. This does not include first year rates.
These will also change depending on the emissions output of the vehicle. Zero emission cars will pay the lowest first year rate at £10 from April 1, until 2029-2030.
Rates for cars emitting between one and 50g of CO2 per kilometre, including hybrids, will increase to £110 for 2025-26. Cars emitting 51-75g/km will rise to £130.
All other vehicles which emit more than 76g/km will see their rates double from current levels. For the most polluting vehicles, namely those with an output higher than 255g/km, prices will rise from £2,745 to a staggering £5,490.
McCarthy also noted how drivers may be impacted by the Expensive Car Supplement, which currently costs motorists around £410 a year if their car has a list price of more than £40,000.
She said: “One of the big things that this does affect is the EV market. The showroom tax, for example, is for cars that are over £40,000 when you buy them new. That will actually affect a lot of the new EVs.
“So there’s that and then there’s also the fact that EVs are going to be taxed for the first time. Owners of EVs will have to start paying road tax, and up until now, they haven’t had to do that.
“For most of us, the changes won’t affect us that much unless we’re buying these expensive cars or you are or potentially might be an EV or hybrid driver.”
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Owners of new electric cars will be charged Vehicle Excise Duty for the first time from April
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The Budget also dealt with the future of the Expensive car Supplement, outlining that the Government recognises how it can create a “disproportionate impact” between EVs and internal combustion engine vehicles.
Despite this, the Government will only consider raising the threshold for zero emission cars “only at a future fiscal event, to make it easier to buy electric cars”.
