First year VED rates to double, etc
Discussion
From the budget:
"VED First Year Rates – The government will change the VED First Year Rates for new cars registered on or after 1 April 2025 to strengthen incentives to purchase zero emission and electric cars, by widening the differentials between zero emission, hybrid and internal combustion engine (ICE) cars.
Zero emission cars will pay the lowest first year rate at £10 until 2029-30.
Rates for cars emitting 1-50 g/km of CO2, including hybrid vehicles, will increase to £110 for 2025-26.
Rates for cars emitting 51-75 g/km of CO2, including hybrid vehicles, will increase to £130 for 2025-26.
All other rates for cars emitting 76 g/km of CO2 and above will double from their current level for 2025-26.
These changes will apply from 1 April 2025.
VED Expensive Car Supplement – The government recognises the disproportionate impact of the current VED Expensive Car Supplement threshold for those purchasing zero emission cars and will consider raising the threshold for zero emission cars only at a future fiscal event, to make it easier to buy electric cars."
"VED First Year Rates – The government will change the VED First Year Rates for new cars registered on or after 1 April 2025 to strengthen incentives to purchase zero emission and electric cars, by widening the differentials between zero emission, hybrid and internal combustion engine (ICE) cars.
Zero emission cars will pay the lowest first year rate at £10 until 2029-30.
Rates for cars emitting 1-50 g/km of CO2, including hybrid vehicles, will increase to £110 for 2025-26.
Rates for cars emitting 51-75 g/km of CO2, including hybrid vehicles, will increase to £130 for 2025-26.
All other rates for cars emitting 76 g/km of CO2 and above will double from their current level for 2025-26.
These changes will apply from 1 April 2025.
VED Expensive Car Supplement – The government recognises the disproportionate impact of the current VED Expensive Car Supplement threshold for those purchasing zero emission cars and will consider raising the threshold for zero emission cars only at a future fiscal event, to make it easier to buy electric cars."
Almost no one will notice. This is only for new cars, and the showrooms hide this sort of info in an "On the road price". So sure, the price will go up, and if you're keen eyed and dig around you'll see the rise. But I doubt very many will notice, remember it's all about the monthlies.
Just as relevant is the failure to increase the VED Expensive Car Supplement threshold.
It has the same effect as not raising personal income tax thresholds - it's the sneaky way of doing nothing, yet dragging more into paying tax. £40,000 really isn't 'luxury' vehicle territory anymore, it's a nicely specced new Skoda!
£410 per year on top of VED for 5 years isn't to be overlooked.
It has the same effect as not raising personal income tax thresholds - it's the sneaky way of doing nothing, yet dragging more into paying tax. £40,000 really isn't 'luxury' vehicle territory anymore, it's a nicely specced new Skoda!
£410 per year on top of VED for 5 years isn't to be overlooked.
Edited by anonymous-user on Wednesday 30th October 15:24
Lil_Red_GTO said:
Ooft. So £5470 first year rate now for the top band (over 255g/km CO2).
I know little about new car VED since it was 2006 the last time I bought a car new, but is that really how much a top end car costs to tax in the first year?? How long does that go on for or is it just the first year?Current rates here:
https://www.gov.uk/vehicle-tax-rate-tables
From April 2025 you can double all the first year rates above 75g.
After the first year it's a flat £190 currently for 2017-on cars, but £600 for 2017-on cars over £40k.
To be fair, not many cars put out over 255g these days, but something like a BMW M2 manual, just to pick an example, puts out 228g so will now pay a first year tax of £4680.
https://www.gov.uk/vehicle-tax-rate-tables
From April 2025 you can double all the first year rates above 75g.
After the first year it's a flat £190 currently for 2017-on cars, but £600 for 2017-on cars over £40k.
To be fair, not many cars put out over 255g these days, but something like a BMW M2 manual, just to pick an example, puts out 228g so will now pay a first year tax of £4680.
crikey thats a lot of tax. a further reason i doubt i'd ever buy a brand new car.
indeed the sweet spot for buying whatever the heck you want is make sure it was registered in 2017. new enough for the flat rate of £190 a year, but now old enough to be outside of the 5 year extra luxury tax.
and as time passes, more years will be eligible for this sweetspot.
indeed the sweet spot for buying whatever the heck you want is make sure it was registered in 2017. new enough for the flat rate of £190 a year, but now old enough to be outside of the 5 year extra luxury tax.
and as time passes, more years will be eligible for this sweetspot.
brillomaster said:
crikey thats a lot of tax. a further reason i doubt i'd ever buy a brand new car.
indeed the sweet spot for buying whatever the heck you want is make sure it was registered in 2017. new enough for the flat rate of £190 a year, but now old enough to be outside of the 5 year extra luxury tax.
and as time passes, more years will be eligible for this sweetspot.
Yup! That’s why I bought mine in Feb 2017, the sweet spot of big discounts, Euro6 compliant, and escaped the £40k+ ‘luxury’ VED rate. I guess it’s a case of “that car will see me out”.indeed the sweet spot for buying whatever the heck you want is make sure it was registered in 2017. new enough for the flat rate of £190 a year, but now old enough to be outside of the 5 year extra luxury tax.
and as time passes, more years will be eligible for this sweetspot.
carl_w said:
yellowbentines said:
Just as relevant is the failure to increase the VED Expensive Car Supplement threshold.
Particularly as most EVs are >£40k and owners will move from paying £0/year this year to £600/year next year. Pica-Pica said:
Yup! That’s why I bought mine in Feb 2017, the sweet spot of big discounts, Euro6 compliant, and escaped the £40k+ ‘luxury’ VED rate. I guess it’s a case of “that car will see me out”.
Very car dependent, if its a mustang youd want one from April 15th onwards as they drop from £680 a year road tax to £190 after first 5 years.Forums | General Gassing | Top of Page | What's New | My Stuff