Beat The Tax: What You Need To Know About Changes To VED

Each year, VED (commonly known as car tax) adjusts in line with inflation. The exact increase depends on your vehicle’s emissions, fuel type, and age. However, rates are generally higher for all vehicles. Some key changes include:

- Newer petrol and diesel cars that registered on or after April 1, 2017, will have a higher standard rate. The rate will increase from £180 to a new amount.

- High-emission vehicles will face even steeper rises in first-year road tax.

From 1 April 2025, the standard VED rate for all cars will be £195 per year after the first year of ownership. Cars with a list price of more than £40,000 will pay an additional £425 from years two to six, a total of £620 a year, or £3100 over six years.​

Selected electric cars will be taxed when registered after 1st April 2025 and tax may vary dependent on the vehicle model and type.

For zero emission cars the first year rate will be £10.

Buy before the 1st April: If you’re in the market for a new car, completing your purchase before the tax increase takes effect can lock in the current lower rates. This is particularly important for petrol and diesel cars, where first-year tax can be significantly higher after April.

Renew your tax early: If your car tax is due soon, you can renew it before April at the current rate. The DVLA allows you to pay for road tax up to a month in advance, so you may be able to lock in the cheaper price before the increase kicks in.

Consider a Low-Emission or Electric Vehicle: If you’re thinking about a long-term investment, switching to a low-emission or electric car could be a smart move. EVs are still tax-free until April 2025, and lower-emission cars generally attract reduced tax rates.

VED is Vehicle Excise Duty which is often known as car tax or road tax. Its the duty in which you pay to the government to legally drive or park your car on public roads.