Vehicle Excise Duty Changes for 2024

Published Date: 8th Feb 2024

 

What New Car Drivers Need to Know

 

Image of a New Ford S-Max in Lucid Red 2024Starting April 1st, 2024, significant changes to Vehicle Excise Duty (VED) in the UK will impact all vehicles except the cleanest ones, both new and used. This comprehensive breakdown will give you the necessary details to anticipate and navigate these changes effectively. Stay informed and prepared for the upcoming modifications to ensure complete compliance and make informed decisions regarding your vehicle.

 

Overview of VED Changes

 

Starting April 1st, 2024, Vehicle Excise Duty (VED) on most new and used cars will experience an approximate 6% increase, aligning with inflation based on the Retail Price Index (RPI). This adjustment aims to maintain fairness and sustainability within the automotive industry. While the annual cost for most drivers will see a modest rise ranging from £5 to £10, it's important to note that individuals with new vehicles emitting higher levels of CO2 will face a more substantial £140 increase in the first year. These measures are part of ongoing efforts to promote greener and more environmentally friendly transportation choices.

 

First-Year Rates Based on CO2 Emissions

 

Pure electric vehicles remain exempt from Vehicle Excise Duty (VED). The VED for "expensive cars" applies to new vehicles priced over £40,000, except pure electric models. For petrol and diesel cars registered after April 1st, 2017, there is a flat rate of £190 per year, whereas hybrid vehicle owners must pay £180. These changes will come into effect from April 2025.

 

  • Pure electric vehicles remain exempt from VED.
  • 'Expensive car' VED applies to new cars over £40,000, excluding pure electric models.
  • Petrol and diesel cars registered after April 1st, 2017, attract a flat rate of £190 annually, while hybrid owners pay £180.
  • Changes Effective from April 2025

 

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From April 2025:

 

From April 2025, Electric Vehicles (EVs) will lose exemption from Vehicle Excise Duty (VED) and will be subject to the next lowest first-year rate, which currently stands at £10. Additionally, the standard VED for EVs will slightly increase from £180 to £190 in April 2024, with further increments projected for 2025. Moreover, EVs with a price tag exceeding £40,000 will also be charged an additional annual fee for years two to six. As for hybrid cars, they will no longer benefit from the £10 discount on first and subsequent year fees, aligning with petrol and diesel vehicles. These changes aim to provide a more comprehensive framework for taxation and ensure fairness across different vehicle categories.

 

  • EVs lose their VED exemption and will pay the next lowest first-year rate, currently £10.
  • Standard VED for EVs will increase from £180 to £190 in April 2024, rising further in 2025.
  • EVs costing over £40,000 will incur an additional annual fee for years two to six.
  • Hybrid cars lose the £10 discount on first and subsequent year fees, aligning with petrol and diesel cars.

 

 

First-Year Car Tax Rates for New Cars (from April 1st, 2024)

 

Image of First Year Tax Rate Table for 1st of April 2024

 

 

Car Tax Rates for Cars Registered between March 1st, 2001, and March 31st, 2017

 

Image of Car Tax Rates Table 2001 - 2017

 

 

Important Reminder: Renewal of Tax-Free Cars

 

Image of a New Ioniq 5 Electric CarOwners of cars eligible for free Vehicle Excise Duty (VED) must still apply for renewal annually, even though no fee is involved. Failure to renew your VED within the specified time frame risks fines of up to £1000. This requirement ensures that an updated record of car ownership and road usage is maintained in the UK, contributing to efficient monitoring and regulation of vehicles on the roads. It also helps the DVLA keep accurate data for statistical analysis and planning purposes, supporting the overall uk transportation system management.

Stay informed about VED changes to make informed decisions when purchasing and renewing your vehicle. For further guidance and assistance when buying a new car, call UK Car Discount on 0161 946 3500.

 

Mastering the art of navigating VED (Vehicle Excise Duty) changes is paramount for every new car driver. By staying ahead and fully comprehending the adjustments and their implications, you can ensure a smooth and hassle-free experience. At UK Car Discount, we are dedicated to offering unparalleled clarity and unwavering support throughout your entire car ownership journey. Whether you need expert advice or amazing deals on your next new car purchase, our team is here to assist you every step of the way. Don't hesitate to call us to discover the exceptional service and value we provide.

 

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Please note vehicle specifications, trim levels, options, and engines are subject to change anytime. Therefore, confirming the vehicle specifications you are interested in when you purchase is essential. Vehicle manufacturers also reserve the right to change specifications without notice.