Rachel Reeves confirms new £3,420 charge for | Tech News

Fees differ relying on when a vehicle was constructed, with a flat £200 charge for vehicles registered after 2017 and a sliding scale of tax bands for fashions registered between 2001 and 2017. Brand new vehicles face completely different charges altogether, with first-year tax expenses among the many most costly on the highway.

Brand-new house owners pay hefty charges of 1000’s of kilos in 12 months one, with expenses calculated based mostly on vehicle emissions. Among these set to pay eye-watering charges are house owners of model new vehicles emitting between 191 and 225g/km of CO2.

Drivers falling into this class can pay £3,420 in 12 months one to get behind the wheel, earlier than reverting to the usual £200 charge from 12 months two. This is a £120 rise on the £3,300 charge issued to highway customers earlier than updates got here into impact in April.

However, charges have massively soared over the previous couple of years, with motorists on this band paying simply £1,650 over the 2024/25 tax 12 months. Motorists uncertain of what their vehicle’s total emissions are can discover the small print of their V5C logbook.

It could possibly be barely simpler to seek out this data for a brand-new car, with producers often promoting emissions totals online or in promotional materials.

Drivers should tax a brand-new car instantly upon first registration to legally drive their new buy on public roads. VED is a legal requirement, with highway customers in a position to pay for their tax for 12 months upfront or in a vary of instalments.

HMRC confirmed new VED charges would come into impact final 12 months after the Autumn Budget.

They mentioned: “As announced at Budget 2025, the Government will introduce legislation in Finance Bill 2025-26 to uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with the Retail Price Index (RPI) for 2026 to 2027. This will take effect from 1 April 2026.”