'Mixed messages' over new car tax rules set to cost drivers over £1,000

New car tax bands have been announced and some drivers could end up paying 'three times more'.

The changes to car tax, which are set to start next year, have left UK drivers confused as the country is trying to switch to electric vehicles (EVs). Despite many people asking for the new rule to be cancelled to encourage more people to choose EVs, electric cars will start paying Vehicle Excise Duty from 2025.

Matthew Walters, who works at ALD Automotive | LeasePlan UK, has shared his thoughts on the decision and the changes to the policy. He said: "From April 2025, VED rates will be equalised across all cars, while new registrations priced over £40,000 will also qualify for the expensive car supplement – a £410 charge, applied to the first five annual renewals.

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“In some cases, this will mean drivers are paying three times more tax than they would for an equivalent petrol or diesel car, adding over £1,000 to a three-year lease contract. It sends mixed messages to drivers at a time when the Government is trying to encourage them to switch to battery power.”

New zero-emission cars registered on or after 1 April 2025 will have to pay the lowest first-year rate of VED (which applies to vehicles with CO2 emissions 1 to 50g/km) currently £10 a year. From the second year of registration onwards, they will move to the standard rate, currently £180 a year, reports Birmingham Live.

The Department for Transport had earlier mentioned: "Removing the VED exemption from April 2025 will marginally reduce the incentive to switch to electric vehicles, but the impact should be minimal given the marginal cost of VED compared to the overall cost of a vehicle."

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