A shocking 59 vehicles spanning 24 manufacturers, including household names like Ford, BMW and Mercedes, will face a £5,690 levy from April 1. The hike follows sweeping changes to Vehicle Excise Duty (VED) rates introduced last year, which saw certain models slapped with an eye-watering £2,745 increase.
The Government opted to significantly raise first-year VED charges for petrol and diesel vehicles from April 2025 onwards. These substantial sums are paid by buyers of brand-new cars before reverting to the standard rate in subsequent years.
The increases have been implemented through a tiered structure, with the highest bands seeing charges roughly double compared to 2024 figures. Vehicles producing over 255 g/km of CO2 bore the brunt of the £2,745 jump, affecting some of the nation's most popular motors on British roads.
People buying new premium marque cars which have a high pollution level will be hit with a massive first year tax charge(Image: Getty Images)
First-year charges climbed to £5,490 - with a further rise to £5,690 anticipated from April 1 2026. Major manufacturers such as Ford and Toyota will see certain models caught up in these changes.
BMW, Mercedes and Audi ranges will also feel the impact. Luxury brands will bear the heaviest consequences from these adjustments, reports the Liverpool Echo.
Vehicles from Porsche, Lotus, Lamborghini and McLaren are among those facing the new charge. Chancellor Rachel Reeves unveiled the measure as a means of encouraging motorists to switch to electric vehicles and widen the gap between 'higher polluting' cars and EVs.
The initial year's tax liability depends on a vehicle's carbon dioxide emissions.
At present, electric vehicle (EV) drivers enjoy exemption from Vehicle Excise Duty (VED), whilst cars emitting between 111g and 150g/km of CO2 are charged £220.
Vehicles pumping out more than 255g/km face an even heftier first-year bill of £5,490 - a figure poised to climb further still. Reforms introduced last April meant EV purchasers paid just £10 for their inaugural year's VED - a rate that has lately stayed the same.
By comparison, motorists running petrol, diesel and hybrid vehicles are preparing for a substantial hike as these charges are due to double.
A Treasury spokesperson informed Car Dealer Magazine that from April 2025, purchasing new models such as a Ford Puma could see the first-year VED bill soar from £220 to £440. For premium marques like a Range Rover, the opening year's duty would surge from £2,745 to an eye-watering £5,490 - with a subsequent increase to £5,690 anticipated.
Chancellor Rachel Reeves declared in her Budget address: "To help drive the transition to electric vehicles the government is strengthening incentives to purchase EVs by widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars."
The plans were further outlined, stating: "The government is also maintaining EV incentives in the Company Car Tax regime and extending 100% First Year Allowances for zero emission cars and EV charge points for a further year."
Budget documents provided more detail on vehicle taxation, explaining: "Vehicle Excise Duty first-year rates are paid for the first year of a car's lifecycle, at the point of registration, and vary based on emissions."
These fees are applied at registration and differ depending on emissions output. The documentation set out upcoming modifications: "From 1 April 2025, the Vehicle Excise Duty first-year rates will be changed to widen the difference between zero-emission, hybrid and internal combustion engine cars."
Projected first year car tax rates from April 1, 2026.
0g/km - Stays at £10.
1-50g/km - Increasing from £110 to £115.
51-75g/km - Increasing from £130 to £135.
76-90g/km - Increasing from £270 to £280.
91-100g/km - Increasing from £350 to £365.
101-110g/km - Increasing from £390 to £405.
111-130g/km - Increasing from £440 to £455.
131-150g/km - Increasing from £540 to £560.
151-170g/km - Increasing from £1,360 to £1,410.
171-190g/km - Increasing from £2,190 to £2,270.
191-225g/km - Increasing from £3,300 to £3,420.
226-255g/km - Increasing from £4,680 to £4,850.
Over 255gkm - Increasing from £5,490 to £5,690.
Following the first year, vehicles will pay the standard rate - anticipated to be £200 (presently £195).
A complete list of new models producing over 255 g/km has been published. Vehicles with a price tag exceeding £40,000 face VED luxury car tax surcharge.
Cars valued at more than £40,000 when purchased brand new (including any additional extras) will incur an extra annual charge of £425 (increased from £410) on top of standard yearly VED car tax rates, applicable from the second through to the sixth year of ownership.
Anyone who's spent over £40,000 on a new motor (extras included) will be hit with an additional £425 charge across a five-year stretch, starting when the vehicle is taxed for its second year.
Once your car hits its sixth year, you'll have forked out an extra £2,125 in tax. From 1 April 2026, the threshold for this so-called "luxury car tax" (that £425 premium) will increase to £50,000 for electric vehicles, while petrol and diesel cars will remain at the £40,000 threshold.
For motorists behind the wheel of a cherished classic or just a trusty runabout registered before March 2001, your charge is calculated using VED engine capacity bands instead of CO2 emissions.
New mileage tax for electric and hybrid vehicles.
From April 2028, electric vehicles will face a new 'mileage tax' to plug the revenue gap created by these vehicles paying no fuel duty. From April 2028, motorists will pay the equivalent of 3p per mile for battery electric cars and £0.015p per mile for plug-in hybrid cars.
The Chancellor states that this revenue will help fund road maintenance. That figure will rise each year in line with the Consumer Price Index.
Currently, there's no confirmed structure for implementing this policy or establishing how motorists will be charged. It's estimated to add roughly £300 for every 10,000 miles travelled in an electric vehicle.
John Cassidy, sales managing director at Close Brothers Motor Finance, said: "A pay-by-mile scheme for electric vehicles risks increasing costs for many drivers, particularly those who rely on their cars for higher annual mileage.
"With energy bills rising and public charging becoming more expensive, motorists will fear that EV ownership could end up being significantly more expensive than traditional ownership."
Expensive car supplement raised for EVs.
Introduced in 2017, the Expensive Car Supplement adds an additional £425 annually for five years after the first tax payment on new vehicles costing more than £40,000.
But the Budget has now increased that limit to £50,000 for electric cars, which means buyers of EVs beneath this price won't face the Expensive Car Supplement.
Cars over 40 years old.
The 40-year classic car tax rule remains unchanged. If your vehicle was manufactured over four decades ago, you'll still fall into the 'historic vehicle' category and pay nothing in VED.
Likewise, road tax exemptions for disabled motorists remain untouched - if you qualify, you'll continue to receive full exemption from these increases.
