Road Fund License Increase.

Vehicle Excise Duty (VED) rates will be increasing from 1st April for new cars and there are some substantial rises.

Electric Car drivers were previously exempt from paying VED but from April 2025 these rules change. New EV's will now pay £10 for the first year and then the standard annual rate - which is currently £195 - from the second year.

All cars emitting between 1-50g/km of CO2 which is most plug-in hybrids will see the first-year tax bill increase to £110. Currently, hybrids in this band pay £0 VED in the first year and petrol and diesel cars £10. 

Cars emitting between 51-75g/km will see the rate rise from £30 (£20 for hybrids) to £135. And the big one, any new vehicles emitting 76 g/km and above will see the rate double, so for cars that fall into the highest bracket with emissions of 255g/km this will increase from £2,745 a year to an eye-watering £5,490 a year!

If the vehicle has a list price of £40,000, you also need to pay an 'expensive car supplement' tax of £410 annually (on top of road tax) for the first five years. This will also apply to EV's from April 2025.