Motorists have been urged to brace for a rise in road tax when buying a new car as the Government adds incentives for electric vehicle owners . Whilst the Labour Government's first budget was noted for a number of sharp tax rises, there were a number of positives for motorists, including a freeze on fuel duty and increased spending on road repairs to cut the number of potholes on the roads. However, with electric vehicle owners set to pay road tax for the first time in April 2025, the Government has increased the amount that petrol and diesel car owners will pay during the first year in which their vehicle is registered.
Currently, during the first year it is registered, vehicles are classified into tax bands based on the amount of carbon dioxide they produce. In many cases, the amount of tax new car buyers will pay will double, with many popular petrol and diesel models subject to hundreds in tax during its first year on the road. In particular, luxury models with large engines are the worst affected by the tax increase, with the cost of taxing a car that makes more than 255g/km of carbon dioxide rising from £2,745 to a staggering £5,490 in its first year.
However, even the smallest petrol-powered city cars will also be subject to a hefty rise in road tax, as the 111 to 130g/km class required to pay £440 for tax - an increase of £220. The flat rate of tax that drivers need to pay in following years will also likely rise in April 2025, likely reflecting the overall inflat.