Major Car Tax Hike to Impact 59 High-Emission Models from April
A total of 59 vehicles from 24 manufacturers, including prominent brands such as Ford, BMW, and Mercedes, will face a substantial first-year Vehicle Excise Duty (VED) charge of £5,690 starting April 1. This significant increase is part of the Government's ongoing adjustments to VED rates, aimed at penalising high-emission cars and encouraging a shift towards electric vehicles.
Background and Rationale for the VED Increases
The hike follows major changes implemented last year, which saw certain vehicles subjected to a £2,745 increase. The Government raised first-year VED charges for petrol and diesel cars from April 2025, with these fees paid by purchasers of brand-new vehicles before dropping to the standard rate afterwards. The rises have been introduced through a banded system, with the top brackets experiencing fees nearly doubling compared to 2024 figures.
Cars emitting more than 255g/km of CO2 have been the most affected, taking the biggest hit from the £2,745 jump. This impacts some of Britain's most common vehicles, with first-year charges escalating to £5,490, and a further increase to £5,690 anticipated from next month. Leading manufacturers, including Ford and Toyota, will see specific models caught up in these alterations.
Premium and Luxury Vehicles Bear the Brunt
BMW, Mercedes, and Audi lineups will also experience the consequences, with premium vehicles facing the steepest penalties. Models from Porsche, Lotus, Lamborghini, and McLaren are among those subject to the new fee. Chancellor Rachel Reeves announced this measure as a strategy to incentivise drivers to invest in electric vehicle ownership and ultimately phase out 'higher polluting' vehicles and EVs.
The first year's tax burden is determined by a vehicle's carbon dioxide emissions. Currently, drivers of electric vehicles (EVs) are exempt from VED, while cars emitting between 111g and 150g/km of CO2 incur a £220 charge. Vehicles with emissions exceeding 255g/km are hit with a hefty first-year fee of £5,490, a figure set to rise even further.
Detailed Breakdown of Affected Models
A comprehensive list of new models producing over 255 g/km has been published, including:
- Lamborghini Urus 4.0 V8 BiTurbo
- BMW X6 M 4.4 V8
- Land Rover Defender 110 5.0 P425 V8
- Ferrari Purosangue 6.5 V12
- Rolls-Royce Ghost 6.75 V12
- Mercedes-Benz G63
- Porsche 718 Cayman 4.0 GT4
- Audi R8 5.2 FSI V10
- Toyota Land Cruiser 2.8D
- Ford Ranger 3.0 EcoBlue
This list extends to numerous other high-performance and luxury vehicles from brands such as Aston Martin, Jeep, Jaguar, and Bentley, highlighting the broad impact across the automotive industry.
Additional Tax Implications for Expensive Cars
Cars with a new purchase price exceeding £40,000 (including any added features) will attract an additional annual payment of £425 (rising from £410) on top of regular yearly VED motor tax costs. This supplement is payable from years one to six of ownership, meaning motorists who spend over £40,000 on a new car will face an extra £425 levy throughout a five-year stretch, totalling an additional £2,125 in taxation by the sixth year.
From April, the threshold for this so-called "luxury car tax" will increase to £50,000 for electric vehicles, while petrol and diesel cars will remain at the £40,000 threshold. This adjustment aims to make EVs more financially attractive compared to their fossil-fuel counterparts.
Future Changes: Mileage Levy for Electric and Hybrid Vehicles
Looking ahead, from April 2028, electric vehicles will face a new 'mileage levy' designed to compensate for lost fuel duty revenue. Starting in April 2028, motorists will pay the equivalent of 3p per mile for battery electric vehicles and £0.015p per mile for plug-in hybrid vehicles. The Chancellor has stated this will help fund road maintenance, with the charge increasing annually in line with the Consumer Price Index.
Currently, no system has been outlined for how this policy will be implemented or how drivers will need to pay. It is projected to add approximately £300 for every 10,000 miles driven in an electric vehicle, introducing a new cost consideration for EV owners.
Exemptions and Unchanged Policies
For vehicles over 40 years old, the classic car tax rule remains unchanged. If your vehicle was made over four decades ago, it will still be classified under the 'historic vehicle' category and will not be subject to any VED. Similarly, road tax exemptions for disabled drivers remain unaffected, ensuring that eligible individuals continue to be completely exempt from these increases.
These sweeping changes underscore the Government's commitment to reducing carbon emissions through fiscal measures, while also adapting tax structures to accommodate the evolving automotive landscape, particularly with the rise of electric vehicles.
