Car tax changes to hit drivers in days with new | Tech News

April may very well be a difficult month for UK car homeowners with a number of car tax changes – though a fuel obligation freeze may help. HMRC has confirmed the extension of the 5p per litre cut on fuel obligation.

This discount was initially carried out in 2022, decreasing fuel obligation to 52.95p per litre. The freeze was set to finish this month, however has now been prolonged till March 2026 and a deliberate increase in line with inflation has additionally been cancelled, offering some reduction for motorists.

However, as drivers save on these prices, others will face important will increase subsequent month as vehicle and highway taxes change. Electric Vehicle (EV) homeowners, who’ve beforehand been exempt from highway tax, are anticipated to be notably affected by these changes.

From April, EV homeowners may very well be liable to pay up to £620 in highway tax. EVs registered between April 1, 2017, and March 31, 2025, face an annual charge of £195.

EVs bought after April 1 this yr might be charged £10 for his or her first yr, which can then increase to the complete £195 in the following tax yr.

Mike Vousden, Motorpoint’s resident EV skilled, has make clear the anticipated changes to vehicle excise obligation for electric car homeowners: “At a simple level, as more car owners make the move to electric, the current exemption means that fewer motorists are paying vehicle excise duty (also known as road tax). So, there’s less tax being collected from motorists.

“The authorities can also be dropping out on fuel obligation as EVs do not require petrol or diesel, which has tax baked into the price on the pump. The authorities has predicted that the loss of these two main sources of motor taxation may end result in a ‘£35 billion black gap in funds’ – making the present system unsustainable.”

Additionally, electric vehicles (EVs) with a price tag over £40,000 will be subject to the £425 Expensive Car Supplement, often referred to as the luxury car tax.

While this might appear to be a hefty new tax burden, owners of petrol and diesel cars will face similar increases. The amount of car tax due in the first year for these vehicles is determined by their CO2 emissions.

The RAC reports that hybrid vehicles emitting under 50g/km of CO2 will see an increase in tax from £10 to £110. Cars that emit between 51 and 75 g/km of CO2 will have their tax rate raised from £30 to £135 and this staggering trend of increases continue for cars emitting higher concentrations of CO2.

More information about car tax changes can be found on the Gov.uk web site.