Every car tax change to hit motorists in 2025 – some to send bills soaring by thousands

Major will impact almost all drivers from April 2025 as part of widespread changes to rates. 

and owners will be most affected by the updates with for the highest polluting machines. 

Next Spring will also see the introduction of new tax rates for while hybrid owners will also face severe hikes. 

Alongside the updates to VED rates, the arguments surrounding a new pay-per-mile charge is likely to rumble on well into 2025. 

Express.co.uk takes a look at the biggest changes and how road users could be caught out.

Standard VED rates 

Car tax VED rates rise with Retail Price Index (RPI) inflation every year and 2025 is no different. 

Motoring experts at have confirmed costs will increase by £5 next year with annual fees set at £195 per annum, up from the current £190 per year fee. 

said an inflationary rise means rates would “remain unchanged in real terms”. However, they accept the fees will have an impact on motorists owning a car, van or motorcycle.

First-year VED rises

The biggest overhaul comes to first-year VED rates with the most polluting

Labour pledged to strengthen EV incentives by “widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars”.

It means fees will double for the highest polluting machines with cars emitting over 255g/km of CO2 set to pay £5,490. Up from £2,745. Models producing between 226 to 255g/km of CO2 will also face heavy rises with rates up from £2,340 to £4.680 per year.

Electric cars 

EVs will pay VED for the first time from 2025 with exemptions for zero-emission cars coming to an end. Electric cars will pay a lower £10 first-year VED rate before switching to the standard charge of £195 every 12 months. 

However, there are concerns that electric car owners could be caught out by the Expensive Car Supplement (ECS) fee. 

This is an extra £410 charge applicable to models valued at over £40,000 for five years with many middle-market EVs over the threshold.

Hybrid vehicles 

First-year tax rates for vehicles emitting between 1-50g/km of CO2 are one of the steepest. Charges for from £10 to £110 with plug-in hybrid models affected. 

Hybrids emitting between 51-75g/km of CO2 will also see major hikes with charges up from £20 to £135.

Double cab pick-ups

Double cab pick-up trucks with a payload of at least one metric tonne  These models will have their benefit-in-kind (BiK) classification updated and will no longer be considered vans. 

It means generous BiK rates will come to an end with fees likely to rise by thousands of pounds in a major blow.

Pay-per-mile 

Although the introduction of a pay-per-mile car tax system has not been confirmed, the discussion around road pricing is likely to continue. A system was not announced in the Autumn Budget despite rumours a new system was in development.

However, Sir John Armitt, chairman of the UK’s stressed a per-mile rate was “inevitable”.