New VED / Road Tax – Changes From April 2024 Explained

As of April 1^st 2024, road tax is changing AGAIN. The last adjustment made to UK car tax was way back in April 2017, so it’s been several years since its was last changed. The British government plans to raise car tax in line with inflation, so expect it to be around a 6% increase.

For many drivers they will see an annual rise of between £5 to £10 a year with the only exemption remaining for new electric vehicles costing less than £40,000 with their zero carbon emissions. Find out more about the 2024 car tax changes and what they mean for you when especially buying a new car after 1^st April 2024.

Why Are The Changes Being Put In Place?

The changes are being made to keep up with the current rate of vehicle CO2 emissions, because of current technologies – around 65% – 75% of vehicles do not pay any road tax, or pay very little. For this reason, the government hiked up the tax rates to fill the hole in the treasury being caused by lower emission vehicles paying low rates of tax as well as to cover the extra costs of living, affecting everyone.

The New Rates For Vehicles Bought On Or After 1^st April 2024

For new cars purchased after the 1st April 2024 the following rates will apply for the first 12 month’s of the vehicle’s life:

Following these first year rates, the rate of tax paid will be dependent on the type of fuel the vehicle uses, electric vehicles will be exempt from the tax, alternative fuel or hybrid vehicles will pay £170 per year (gaining a MASSIVE £10 discount!)  whilst petrol or diesel vehicles will pay £180 annually.

The New Annual Car Tax Rates for Vehicles Bought Between 1st March 2001 & 31st March 2017

For vehicles first registered from the 1st March 2001 till the 31^st March 2017, the following tax rates will apply.

As you can see from the above table, the amount of tax is increasing for all vehicles, unless they are fully emission free – though electric cars will be taxed from 2025 so there is no escape!

New Cars over £40,000

If your car has a “list” price of more than £40,000 then you will have to pay an extra £390 from the second year (alongside the standard car tax rate) for 5 years, this is up from £310 a year as specified back in 2017.

Bear in mind this “list” price is not the base price, it is the total price of your new car INCLUDING all options. So if you buy a car with a value of £32,000 and spec it up with £8000 worth of options (trust us, it’s not that hard!) you’ll fall into this band, so watch out!

Also if you buy an electric vehicle worth over £40,000 then you will be required to pay this extra £390 from the 2nd year through to the 5th year, you just won’t pay the £180 as that isn’t (yet) required as a duty for zero carbon emission vehicles.

Keep Your Vehicle In its Best Condition With Autocare

If you want to avoid these tax hikes, you’ll either want to purchase a new vehicle before 1^st April 2024, or keep your older vehicle on the road for longer. Taking your existing vehicle for regular servicing and repairs ensures that it’s in its best condition. Give us a call on 01291 627137 and find out what we can do for you.