As with many other announcements in the March Budget, the Government stated that it would increase Vehicle Excise Duty (VED) rates in line with inflation (Retail Price Index), at a rate of 10.1 percent. This applies to cars, vans and motorcycles, with heavy goods vehicles (HGVs) seeing their VED rates frozen for 2023-2024 to support the sector.
Cars with a list price of over £40,000 at the point of first registration will pay the additional rate from the start of the second licence.
This means any vehicle which costs more than that will pay an additional rate of £390 per year for five years, an increase of £35 per year compared to last year.
Some drivers will not need to pay any VED on their vehicle including electric car drivers and those with classic cars over 40 years of age, although they must still be taxed.
Most prices are increasing, with some drivers seeing no price differences at all, while others could be forced to pay an extra £340 per year. The full list of car tax changes can be found below.
Rates of vehicle tax for cars first registered on or after April 1, 2018
If a vehicle produces CO2 emissions of 0g per kilometre, the VED rate will remain at £0.
If a vehicle produces CO2 emissions of between one and 50g/km, the standard rate will increase from £165 to £180, while the first year rate will remain at £10.
If a vehicle produces CO2 emissions of between 51 and 75g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £25 to £30.
If a vehicle produces CO2 emissions of between 76 and 90g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £120 to £130.
If a vehicle produces CO2 emissions of between 91 and 100g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £150 to £165.
If a vehicle produces CO2 emissions of between 101 and 110g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £170 to £185.
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If a vehicle produces CO2 emissions of between 111 and 130g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £190 to £210.
If a vehicle produces CO2 emissions of between 131 and 150g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £230 to £255.
If a vehicle produces CO2 emissions of between 151 and 170g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £585 to £645.
If a vehicle produces CO2 emissions of between 171 and 190g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £945 to £1,040.
If a vehicle produces CO2 emissions of between 191 and 225g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £1,420 to £1,565.
If a vehicle produces CO2 emissions of between 226 and 255g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £2,015 to £2,220.
If a vehicle produces CO2 emissions of more than 255g/km, the standard rate will increase from £165 to £180, while the first year rate will increase from £2,365 to £2,605.
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Vehicle tax rates for cars registered on or after March 1, 2001 and before April 1, 2017
For cars in Band A (up to 100g/km of CO2), the VED rate will remain at £0.
For cars in Band B (between 101 and 110g/km of CO2), the standard rate will remain at £20.
For cars in Band C (between 111 and 120g/km of CO2), the standard rate will increase from £30 to £35.
For cars in Band D (between 121 and 130g/km of CO2), the standard rate will increase from £135 to £150.
For cars in Band E (between 131 and 140g/km of CO2), the standard rate will increase from £165 to £180.
For cars in Band F (between 141 and 150g/km of CO2), the standard rate will increase from £180 to £200.
For cars in Band G (between 151 and 165g/km of CO2), the standard rate will increase from £220 to £240.
For cars in Band H (between 166 and 175g/km of CO2), the standard rate will increase from £265 to £290.
For cars in Band I (between 176 and 185g/km of CO2), the standard rate will increase from £290 to £320.
For cars in Band J (between 186 and 200g/km of CO2), the standard rate will increase from £330 to £365.
For cars in Band K (between 201 and 225g/km of CO2), the standard rate will increase from £360 to £395.
For cars in Band L (between 226 and 255g/km of CO2), the standard rate will increase from £615 to £675.
For cars in Band M (over 255g/km of CO2), the standard rate will increase from £630 to £695.
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