Auto advice: What new car tax measures are likely to be introduced in Budget 2025?

Yes, a weight-based tax for new cars has been suggested by the Energy and Vehicle Taxation Tax Strategy Group. The idea is to impose a surcharge based on the car’s weight, adding to the existing emissions-based taxes. Cars below a certain threshold would not be taxed, while those between base and upper thresholds would incur a standard rate per kg and cars above the upper threshold would face a higher surcharge. Initially, this tax would apply to internal combustion engine vehicles, with the possibility of including EVs later on. The rationale is that heavier vehicles often correlate with higher emissions, thus warranting higher taxes.

Our motoring editor answers your questions on potential tax changes in Budget 2025 "A weight-based tax for new cars has been suggested by the Energy and Vehicle Taxation Tax Strategy Group." Image: Getty Yes, a weight-based tax for new cars has been suggested by the Energy and Vehicle Taxation Tax Strategy Group. The idea is to impose a surcharge based on the car’s weight, adding to the existing emissions-based taxes.

Cars below a certain threshold would not be taxed, while those between base and upper thresholds would incur a standard rate per kg and cars above the upper threshold would face a higher surcharge. Initially, this tax would apply to internal combustion engine vehicles, with the possibility of including EVs later on. The rationale is that heavier vehicles often correlate with higher emissions, thus warranting higher taxes.

Yes, EV supports are expected to continue. The Vehicle Registration Tax relief for battery electric vehicles provides significant reductions up to €5,000 for vehicles under €40,000. The relief, set to expire in 2025, might be extended with adjusted thresholds to ensure cost-effectiveness.

Additionally, the Benefit-in-Kind relief for employer-provided EVs, offering reductions up to €45,000, is extended to 2027, which aims to promote the adoption of low-emission company cars There is a strong push to phase out the Diesel Excise Gap, which sees diesel taxed less than petrol. The Climate Action Plan includes commitments to review and reform environmental tax measures regularly, potentially leading to annual increases in diesel excise rates. Equalising the diesel and petrol tax rates could increase the cost of a 60-litre diesel tank by about €8.

56. Introducing emissions-based criteria for light commercial vehicles, which are currently 96.17pc diesel, to encourage the transition to electric options is also being considered.

Top Tip: Other options include a 1pc increase in VRT rates for high-emission vehicles, potentially raising €26m, or a €5 per mg/km increase to the NOx surcharge, which could likely generate an additional €15.5m Got a question? Contact [email protected] Join the Irish Independent WhatsApp channel Stay up to date with all the latest news.