The new VED rates will come into force from April with petrol, diesel, hybrid and electric car owners set to be affected

Motorists are bracing for a significant hike in car tax costs, with experts warning of imminent rises. From April, Vehicle Excise Duty (VED) rates will increase, impacting nearly all petrol and diesel vehicle owners.

Even those purchasing new electric or hybrid vehicles won’t escape unscathed, as first-year rates are set to introduce new charges. Electric vehicle (EV) owners will now face standard fees, and those with pricier models could be hit with an additional £425 due to the Expensive Car Supplement (ECS).

Campervan Co has highlighted that owners of older electric vehicles could be particularly hard-hit, with potential fee increases of up to £180—a substantial blow for those watching their spending. The company outlined on their website: “The new 2025 road tax, or Vehicle Excise Duty (VED), rates in the UK have seen significant changes.”

They added: “These changes are part of the government’s ongoing efforts to encourage the use of more environmentally friendly vehicles and reduce carbon emissions.”

Further explaining the rationale, they noted: “The new VED rates are structured to reflect the environmental impact of different types of vehicles, with higher taxes for those with higher emissions.”

However, they pointed out a downside for EV owners: “Gone however are the lower rates for older EVs – with rates going up from £10 a year to £190.”

In a stark shift, electric cars will be subject to new VED fees for the first time in 2025, marking the end of years of tax exemptions and discounts.

The Tory-led policy, first unveiled in 2022, has been upheld by Labour since assuming power. The upcoming adjustments aim to equalise the cost of electric vehicles with their petrol and diesel counterparts.

Yet, there are concerns that implementing a tax on electric vehicles might hinder their popularity. Ben Nelmes, CEO of NewAutomotive, has been vocal in his call for scrapping these charges ahead of spring.

He commented, “Our recommendations would avoid the creation of an electric car tax penalty that is currently due to come into force in April 2025, and which may prevent more people from accessing the benefits of getting a used electric car.”