The Automobile Association (AA) has revealed that small and family car owners could face a £150 car tax increase if they upgrade their vehicle, with the new rules having come into force on April 1, 2022
The AA has alerted drivers following the introduction of new car tax changes this month. The motoring organisation highlighted that owners of smaller and family cars, who currently enjoy lower road tax rates, could face paying around £150 on average if they decide to upgrade their vehicle.
Car tax amounts vary based on the age of your vehicle and its carbon dioxide emissions. Cars registered from March 1, 2001, to March 31, 2017, can pay as little as £20 annually in car tax if they emit up to 100g/km of CO2.
However, if you’re getting an upgraded car registered post-April 1, 2017, be prepared for a standard annual car tax rate of £195, irrespective of emission levels. Different rates apply during the first year for brand-new cars, with some drivers potentially facing lower taxes upon upgrading, reports the Mirror.
For vehicles registered between March 1, 2017, and March 31, 2017, the highest rate soars to £760 annually for those emitting over 255g/km of CO2. The AA’s calculations suggest that the average driver could end up spending £650 each year on fuel duty and road tax combined.
Jack Cousens, head of roads policy at The AA, remarked: “VED changes and future increases threaten a major financial shock to the finances of millions of car owners whose vehicles are still paying VED under the 2001-2017 CO2-banded system.”
“For those with ageing low-CO2 small family and city cars, the transition to the current standard VED rate could see a hike of £150 or more a year on their motoring tax. With the average car currently paying £436.84 in fuel duty a year – or £524.21 when VAT is added at the pump – a £150 increase in the VED they will pay represents a 34% hike (29% with VAT) on top of what they are paying in fuel duty.”
For the first time, electric vehicles are now also subject to car tax. If your EV was registered on or after April 1, 2017, you will pay the standard rate of car tax, which will be £195 a year from April 2025.
If your EV was registered between March 1, 2001 and March 31, 2017, your annual car tax bill will be £20.
The first-year car tax rate – known as the showroom tax – has also just increased for all types of cars. This is the tax you pay for the first year of owning a brand new vehicle – after this, you move to the standard rate of car tax.
If you buy a brand new EV, the first-year car tax rate will be £10.
If you purchase a car that emits between 1-50g/km of CO2, the first-year car tax rate has just risen from £10 to £110. The rate for new cars emitting 51-75g/km of CO2 has increased from £30 to £130, while all other rates for cars emitting 76g/km of CO2 and above have doubled from their current level.
This implies that for a car emitting more than 255g/km of CO2, the first-year car tax rate has risen from £2,745 to £5,490. A comprehensive list of these changes and how much extra you’ll pay when buying a brand new car can be found below.
From the second year onwards, the standard car tax rate of £195 applies to all vehicles registered after April 2017.
First-year car tax rates from April 2025
- 0g/km – £0 now, rising to £10
- 1-50g/km – £10 now, rising to £110
- 51-75g/km – £30 now, rising to £130
- 76-90g/km – £135 now, rising to £270
- 91-100g/km – £175 now, rising to £350
- 101-110g/km – £195 now, rising to £390
- 111-130g/km – £220 now, rising to £440
- 131-150g/km – £270 now, rising to £540
- 151-170g/km – £680 now, rising to £1,360
- 171-190g/km – £1,095 now, rising to £2,190
- 191-225g/km – £1,650 now, rising to £3,300
- 226-255g/km – £2,340 now, rising to £4,680
- 255+g/km – £2,475 now, rising to £5,490
Car tax rates from April 2025 for cars registered between March 1, 2001 and March 31, 2017
- Up to 100g/km – £0 now, rising to £20
- 101-110g/km – £20 (no change)
- 111-120g/km – £35 (no change)
- 121-130g/km – £160, rising to £165
- 131-140g/km – £190, rising to £195
- 141-150g/km – £210, rising to £215
- 151-165g/km – £255, rising to £265
- 166-175g/km – £305, rising to £315
- 176-185g/km – £335, rising to £345
- 186-200g/km – £385, rising to £395
- 201-225g/km – £415, rising to £430
- 226-255g/km – £710, rising to £735
- 255+g/km – £735, rising to £760