Upcoming Car Tax Changes in April 2025: What It Means for You

As we approach April 2025, changes to car tax (also known as Vehicle Excise Duty or VED) in the UK are set to impact many motorists. At Lodge Automotive, we always strive to keep our customers informed and prepared for what’s coming next, so I wanted to take a moment to break down these changes and explain how they might affect you.

What’s Changing?

From April, the government is making significant changes to the way car tax is calculated. These changes aim to reduce emissions and encourage more eco-friendly choices when it comes to vehicles. Here’s a closer look at the key updates:

1. New Emission-Based Tax Bands
   The VED system will now place even more emphasis on CO2 emissions. Cars emitting higher levels of CO2 will face higher taxes, while low-emission vehicles will be taxed at lower rates. If you drive a petrol or diesel car, you could see a rise in your annual tax bill depending on the level of emissions your vehicle produces. On the flip side, hybrid and electric vehicles will continue to benefit from lower tax rates, reflecting their cleaner environmental impact.
2. Increased Tax for Larger Vehicles
   Larger, more polluting vehicles, such as 4x4s and SUVs, will see an increase in their road tax costs. This is part of the government’s initiative to discourage the use of high-emission vehicles and push for a greener future. If you own a larger vehicle, it’s important to check how much more you could be paying come April.
3. Changes to First-Year Tax
   The first-year tax for new cars will also be affected by this overhaul. The tax bands will be adjusted to reflect a wider range of CO2 emission thresholds. For new buyers, this could mean a higher initial tax charge, especially for vehicles that emit more carbon dioxide. However, the change will primarily impact those purchasing new cars, not those renewing an existing vehicle’s tax.

How Will This Affect You?

If you already own a vehicle, you might not notice a huge difference straight away, but the tax changes will gradually make it more expensive to run a high-emission vehicle. For example, if you drive a diesel vehicle with a higher CO2 emission rate, you could face an increase in your road tax fees. This is a good time to think about how your car aligns with the government’s environmental goals and whether you might want to consider switching to a more eco-friendly option, such as an electric or hybrid vehicle.

For anyone looking to purchase a new car in the coming months, the changes could make certain models more expensive to tax. If you’re leaning toward a larger vehicle, it’s worth factoring in the higher tax rates as part of your overall cost considerations. If you opt for a low-emission or electric vehicle, you’ll be able to take advantage of the more affordable tax bands.

What Should You Do?

If you’re unsure how these changes will impact you specifically, now’s the time to check the emission levels of your current car. You can find this information on your V5C logbook or by using an online tool. At Lodge Automotive, we are always here to help if you have any questions or need advice on choosing a car that fits both your needs and your budget.

We also recommend reviewing your current tax band to see if you’re due to pay more from April onwards. If you’re considering purchasing a new vehicle, this could be the right moment to explore alternatives and find a model that works for both your lifestyle and the environment.

Stay informed, stay ahead and drive smart.