Rates of tax

▶ Vehicle Excise Duty (VED) rates (or road tax as many refer to it) in the UK have risen from April 1st across most sectors.

I’ll start with new cars registered from April 1st. A £0 band for cars emitting zero emissions – BEVS – still exists. However, from 2025, VED will be applied to new BEV cars and existing ones registered on or after April 1, 2017. First year rates will move out of the current Band A (£0) and move to Band B (£10) for newly purchased cars, then increase to £180 from the second year on. If the BEV has a current list price exceeding £40,000, then a secondary rate of VED will be applied – which currently this year totals £590 per annum for an alternative fuel car.

New ICE cars registered on or after April 1st, 2024 have had some minor increases in annual VED. There are two listings for diesel engines – if the engine is RDE2 compliant the annual rate is slightly less than a diesel engine that is RDE2 non-compliant. RDE2 relates to NOX limits. For instance, in the 51-75g/km Band, RDE2 is £30, whereas noncompliant is £130 for the first year.

It’s CO2 emissions that the Bands adhere to. As in 2023, there are 13 Bands in 2024 ranging from zero to over 255g/km. The highest polluting new cars must pay £2745 for the first year and then £190 each year thereafter. Unless, of course, the list price exceeded £40,000 – that would see VED increase by £410 to make it £600 per annum for the next five years.

To explain that again, if a car has more than a £40k list price, then year one VED reflects emissions output, years 2-5 equals £600pa (£190 + £410). Year 6 reverts to £190 (or whatever the price will be in the future). If the new list price is less than £40k, then year two onwards is £190 across the board for petrol and diesel engines – emissions output isn’t considered. The fixed £190 applies to all cars registered since April 1st, 2017.

Alternative fuel cars – includes hybrids, bioethanol and LPG – pay slightly less first year tax and £180 from the second year.

Well, that was a bit confusing, but we will move onto cars registered from March 1st, 2001 to April 1st, 2017. Rates are increasing immensely here, with older cars polluting the most being targeted.

My Kia Sedona 2.9 diesel auto was £675 in 2023, now this year £710 every 12 months. If only I could use it more as the engine is still not working correctly. I’m thinking of putting it on SORN as the direct debit is now over £62 a month! Many cars in this Band L and the slightly higher top Band M (£735) are currently in a state of uncertainty with current owners. What to do – if you try to sell the vehicle, who will want it – unless it’s considered a ‘modern classic’ and possibly used for six months of the year and rested for the other six. If your car falls into this higher tax bracket do let me know your thoughts.

Some pre-2017 manufactured models are the best cars to run in my opinion. You can get many vehicles that fall into Band C (111 to 120g/km) and below. Band A is still £0, Band B is £20, and

Band C increased last year to £35 from £30. In the July 2024 issue, we have a report on cars that you can buy within Band A – you might be surprised by some of the results.

Pre-2001 cars are still in the same two categories – under 1549cc = £210 per annum and over 1549cc = £345.