How is car tax changing?
Vehicle excise duty is being overhauled. Here, the PA news agency answers 10 key questions on the changes.
Major changes to vehicle excise duty (VED) are coming.
Here, the PA news agency answers 10 key questions on what is happening.
– What is VED?
VED, often referred to as car tax, is a tax on the ownership of a vehicle.
Rates vary depending on the age of a vehicle and its CO2 emissions.
– Can you give me some examples?
A new Volkswagen Golf R petrol model has a first year rate of £220, with subsequent years costing £190 annually.
Zero and low-emission vehicles such as electric cars are exempt.
– What is happening?
The exemption for zero and low-emission vehicles will end.
The overhaul comes into force on Tuesday April 1.
– Why?
The policy was announced by then-chancellor Jeremy Hunt under the Conservative government in November 2022.
At the time, he said he wanted to “make our motoring tax system fairer”.
– What impact will this have?
EV owners will be charged VED of £10 for the first year after a vehicle is registered, and then the standard rate of £195 for every subsequent year of ownership.
– What is the expensive car supplement?
Also known as the luxury car tax, this affects vehicles with a list price in excess of £40,000.
From April 1, the amount will be £425.
– Why is this an issue for EVs?
New EVs registered from April 1 will be liable for the expensive car supplement.
– What are the concerns about this in relation to the switch to electric motoring?
EVs tend to cost more than their equivalent petrol and diesel cars, so they are more likely to be affected by the expensive car supplement.
There are fears this will put some people off from going electric.
