Models from 24 brands will be subject to the huge first-year payment
People buying new premium marque cars which have a high pollution level will be hit with a massive first year tax charge(Image: Getty Images)
A staggering 59 vehicles across 24 different manufacturers, including well-known brands such as Ford, BMW and Mercedes, will be hit with a £5,690 charge from April 1. This increase comes after major revisions to Vehicle Excise Duty (VED) rates brought in last year, which left certain models facing a whopping £2,745 rise.
The Government chose to dramatically increase first-year VED fees for petrol and diesel cars from April 2025 forward. These represent substantial amounts paid by purchasers of brand-new vehicles before dropping to the standard rate subsequently.
The rises have been rolled out on a tiered system, with the highest bands witnessing charges approximately double those of 2024 levels. Cars emitting more than 255 g/km of CO2 experienced the full force of the £2,745 hike, impacting some of Britain’s most sought-after vehicles on our roads.
Initial year fees rose to £5,490 – with an additional increase to £5,690 expected from April 1 2026. Popular manufacturers including Ford and Toyota will witness selected models swept up in these alterations. BMW, Mercedes and Audi lineups will also experience the effects. Premium marques will shoulder the most severe repercussions from these modifications. Motors from Porsche, Lotus, Lamborghini and McLaren feature among those confronting the fresh levy.
Chancellor Rachel Reeves announced the policy as a way to push drivers towards electric vehicle purchases and create a larger divide between ‘higher polluting’ cars and EVs. The first year’s tax burden is determined by how much carbon dioxide a vehicle emits.
Currently, those choosing electric vehicles (EVs) benefit from Vehicle Excise Duty (VED) exemption, while cars producing between 111g and 150g/km of CO2 face a £220 charge.
Motors exceeding 255g/km are hit with an even steeper first-year fee of £5,490 – a sum set to rise even higher. Changes brought in last April meant EV buyers paid just £10 for their first year’s VED – an amount that has recently remained unchanged.
In contrast, drivers of petrol, diesel, and hybrid cars are bracing for a significant increase as these fees are set to double.
A Treasury spokesman told Car Dealer Magazine that from April 2025, buying new vehicles such as a Ford Puma could see the first-year VED cost leap from £220 to £440. For luxury brands like a Range Rover, the initial year’s duty would jump from £2,745 to a staggering £5,490 – with a further rise to £5,690 expected.
Chancellor Rachel Reeves announced in her Budget speech: “To help drive the transition to electric vehicles the government is strengthening incentives to purchase EVs by widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars.”
It further detailed plans stating: “The government is also maintaining EV incentives in the Company Car Tax regime and extending 100% First Year Allowances for zero emission cars and EV charge points for a further year.”
The Budget documentation offered additional clarity regarding vehicle taxation, outlining: “Vehicle Excise Duty first-year rates are paid for the first year of a car’s lifecycle, at the point of registration, and vary based on emissions.”
These charges are levied during registration and fluctuate according to emission levels. The document elaborated on forthcoming changes: “From 1 April 2025, the Vehicle Excise Duty first-year rates will be changed to widen the difference between zero-emission, hybrid and internal combustion engine cars.
Expected first year car tax rates from April 1, 2026
0g/km – Remains at £10
1-50g/km – Rising from £110 to £115
51-75g/km – Rising from £130 to £135
76-90g/km – Rising from £270 to £280
91-100g/km – Rising from £350 to £365
101-110g/km – Rising from £390 to £405
111-130g/km – Rising from £440 to £455
131-150g/km – Rising from £540 to £560
151-170g/km – Rising from £1,360 to £1,410
171-190g/km – Rising from £2,190 to £2,270
191-225g/km – Rising from £3,300 to £3,420
226-255g/km – Rising from £4,680 to £4,850
Over 255gkm – Rising from £5,490 to £5,690
After first year will pay standard rate – expected to be £200 (currently £195)
A full list of new models emitting over 255 g/km has been released.
Audi RS6 4.0 TFSI V8Audi S8 4.0 TFSI V8McLaren GT 4.0T V8Audi R8 5.2 FSI V10Lamborghini Huracan 5.2 V10Chevrolet Corvette Stingray 6.2 V8Volkswagen Amarok 3.0 TDIAston Martin DBX 4.0 V8Ferrari Roma 3.8T V8Audi SQ7 4.0 TFSI V8Range Rover Sport 4.4P V8Jaguar F-Pace 5.0 P575 V8Aston Martin DB12 4.0 V8Porsche 911 3.7T 992 TurboJeep Wrangler 2.0 GMEFord Ranger 2.0 TD EcoBlueAudi RSQ8 4.0 TFSI V8Lotus Emira 3.5 V6Bentley Continental 4.0 V8Audi SQ8 4.0 TFSI V8Aston Martin Vantage 4.0 V8Toyota Hilux 2.8DPorsche Macan 2.9T V6Mercedes-Benz SL55Range Rover 4.4 P530 V8Mercedes-Benz AMG GT 4.0 V8Porsche 718 Cayman 4.0 GT4Lamborghini Urus 4.0 V8 BiTurboAudi RS7 4.0 TFSI V8Ford Mustang 5.0 V8Toyota Land Cruiser 2.8DBentley Continental 6.0 W12Mercedes-Benz GLC63Ford Ranger 3.0 V6INEOS Grenadier 3.0PRange Rover 4.4 P615 V8Land Rover Defender 90 5.0 P425 V8Rolls-Royce Ghost 6.75 V12Ford Ranger 3.0 EcoBlueMercedes-Benz G63Ferrari Purosangue 6.5 V12Rolls-Royce Cullinan 6.75 V12Alfa Romeo Stelvio 2.9 V6 Bi-TurboMercedes-Benz GLE63Maserati Levante 3.0 V6Porsche Cayenne 4.0T V8BMW M8 4.4 V8Maserati MC20 3.0 V6Land Rover Defender 110 5.0 P425 V8Mercedes-Benz G400DLamborghini Revuelto 6.5 V12Bentley Bentayga 4.0 V8BMW X7 M 4.4 V8BMW X6 M 4.4 V8BMW Alpina XB7 4.4 V8Bentley Flying Spur 4.0 V8Maserati Levante 3.8 V8BMW X5 M 4.4 V8Mercedes-Benz GLS63hVehicles costing more than £40,000 are subject to VED luxury car tax surcharge.
Motors valued above £40,000 when bought brand new (including additional extras) will face an extra annual charge of £425 (up from £410) on top of the standard yearly VED car tax fees, applying from years one through to six of ownership.
Those who’ve invested more than £40,000 on a new vehicle (extras included) will be stung with an additional £425 fee over a five-year period, beginning when the car is taxed for its second year.
By the time your vehicle reaches its sixth birthday, you’ll have paid out an extra £2,125 in tax. From 1 April 2026, the threshold for the so-called “luxury car tax” (that £425 premium) will rise to £50,000 for electric vehicles, whilst petrol and diesel cars will continue to be set at the £40,000 mark.
For those driving a beloved older model or simply a reliable runabout registered before March 2001, your charge is determined using VED engine capacity bands rather than CO2 emissions.
New mileage tax for electric and hybrid vehicles
From April 2028, electric vehicles will be charged a new ‘mileage tax’ to fill in the gap left by no fuel duty being paid for the vehicles. From April 2028, drivers will be charged an equivalent of 3p per mile for battery electric cars and £0.015p per mile for plug-in hybrid cars. The Chancellor says that this will go towards helping road maintenance.
That price will increase annually with the Consumer Price Index. At present, there is no announced framework for how this policy will be implemented or how drivers will pay for it. It would add an estimated £300 per 10,000 miles driven in an EV.
John Cassidy, sales managing director at Close Brothers Motor Finance, said: “A pay-by-mile scheme for electric vehicles risks increasing costs for many drivers, particularly those who rely on their cars for higher annual mileage.
“With energy bills rising and public charging becoming more expensive, motorists will fear that EV ownership could end up being significantly more expensive than traditional ownership.”
Expensive car supplement raised for EVs
The Expensive Car Supplement was introduced in 2017 and adds an extra £425 per year for five years following the initial tax payment on new cars priced over £40,000.
However, in the Budget, that threshold has been raised to £50,000 for electric vehicles, meaning that buyers of EVs under this price won’t have to pay the Expensive Car Supplement.
Cars over 40 years old
The classic car 40-year tax rule is still firmly in place. If your car was built more than 40 years ago, you’re still in the ‘historic vehicle’ bracket and pay £0 in VED. Similarly, road tax exemptions for disabled drivers haven’t changed—if you’re eligible, you’ll continue to be fully exempt from these hikes.
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