Road Tax Increase 2024: Vehicle Excise Duty Key Changes and Details!

In the UK, road tax for 2024 sees Vehicle Excise Duty (VED) rates increasing by around 6%. In 2024–2025, the standard rate increases to £190 from £180. EVs lose VED exemption in 2025, pay £10 first-year rate, then £190 standard VED.

Road Tax Increase 2024

The road tax increase in the UK for 2024 entails adjustments to Vehicle Excise Duty (VED) rates, impacting various vehicle owners. 

The VED rates are set to rise by approximately 6%, with the standard rate projected to increase from £180 to £190 for the 2024/25 tax year. 

Electric vehicles (EVs) will no longer be exempt from VED starting in 2025, with EV owners required to pay the first-year rate at the next lowest level, currently set at £10, and then the standard VED rate of £190.

Vehicle Excise Duty 2024 Details 

There are categories of vehicles that are impacted differently by the changes.

  • Most Cars: Generally, any car (including petrol, diesel, and hybrids) first registered on or after April 1, 2017, sees a standard increase of £10 to £190 per year.
  • Older Cars (Pre-April 2017): These vehicles have a different tax structure based on engine size and fuel type. They might see a smaller or larger increase depending on their specifics. 
  • High-Emission Cars: New petrol and diesel cars with CO2 emissions exceeding 255 g/km face a steeper rise, around £140 more in the first year.
  • Electric Vehicles (EVs): Currently, only fully electric vehicles are completely exempt from VED. However, this is set to change in April 2025, when EVs will fall under a new VED band, losing their current exemption.
  • Vehicles that qualify as “historic” are exempt from VED altogether. To qualify, a car must be at least 40 years old. As of April 1, 2024, this means any car manufactured before January 1, 1984 is exempt. 

Key Changes Road Tax Increase 2024

The key changes to road tax (VED) in the UK for 2024:

  • Increase Based on Inflation: VED rates are now linked to the Retail Price Index (RPI), meaning they’ll rise in line with inflation each year.
  • Standard Rate Increase: Cars first registered on or after April 1, 2017, see a standard increase of £10 to £190 per year.
  • High-Emission Penalty: New petrol and diesel cars with CO2 emissions exceeding 255 g/km face a steeper rise of approximately £140 in the first year.
  • EV Exemption Ending (April 2025): The current exemption for fully electric vehicles will be removed in April 2025. They will fall under a new VED band, so expect them to incur some tax then.
  • No Change for Historic Vehicles: Vehicles classified as “historic” (at least 40 years old) remain exempt from VED altogether.

Impact of Road Tax Increase (VED) 2024 in the UK

The 2024 VED increase in the UK has generated a mixed bag of impacts, affecting both drivers and the government’s goals:

For Drivers:

  • Increased Costs: The rise in VED adds to the already growing burden of car ownership. With rising fuel prices, this can be a significant financial strain for many households, particularly those reliant on cars.
  • Potential Shift in Car Choice: The higher rates for polluting vehicles might incentivize some drivers to consider cleaner options like electric cars or hybrids. 
  • This could lead to a gradual shift towards a greener car population in the long run. However, the upfront cost of electric vehicles remains a barrier for many.
  • Impact on Different Groups: The increase is not uniform. High-emission car owners see a steeper rise, placing a greater financial burden on those who might not be able to easily switch vehicles. 
  • Older cars may see a smaller increase or even no change depending on their specifics.
  • Revenue Stability: Linking VED to inflation ensures a more predictable income stream for road maintenance and improvements. This can help with long-term planning for infrastructure projects.
  • Environmental Goals: The increased tax on polluting vehicles aligns with the government’s goal of reducing emissions. 

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