The UK government has announced a car tax VED rise for older vehicles, affecting cars registered between 1985 and 2001. This change means that owners of vehicles just under the 40-year historic tax exemption threshold will face higher road tax fees. While classic cars over 40 years old remain exempt, those built within this 16-year period will see a VED rise based on engine size rather than emissions, says Daily Express.
How Much Will Car Owners Pay?
The VED increase, effective from April 1, 2025, will see motorists paying more to keep their older vehicles on the road. According to Pete Barden’s analysis, cars with larger engines over 1549cc will now pay £360, up from £345—a £15 increase. Meanwhile, vehicles with smaller engines below 1549cc will see their tax rise from £210 to £220.
Although these increases may seem minor, they follow a trend of annual VED hikes linked to Retail Price Index (RPI) inflation. The HM Revenue and Customs (HMRC) has confirmed that this year’s rise is part of a standard uprating, ensuring that zero-emission vehicles are also included in the tax system from April 2025.
Why Are Older Vehicles Facing The Car Tax VED Rise?
The UK government has been reforming car tax policies to align with environmental goals and ensure fairness across all vehicle types. Historically, cars registered before March 1, 2001 were taxed based on engine size, while newer models were taxed based on CO2 emissions, according to After Tax Blog UK.
With the latest VED rise, owners of older petrol and diesel cars will bear the brunt of increased costs. While the £15 to £20 annual rise may not seem drastic, it adds to the financial burden for those maintaining older vehicles that do not qualify for historic tax exemptions.
How Does This Compare To Newer Vehicles?
ThWhile older vehicles are seeing moderate increases, the biggest tax hikes affect brand-new petrol and diesel cars. First-year rates for high-emission models have doubled, meaning owners of the most polluting cars could pay an extra £2,745, bringing their total annual road tax bill to nearly £5,500, says Daily Express.
This shift reflects the government’s push toward zero-emission vehicles, with electric cars losing their tax exemptions from April 2025.
What Can Car Owners Do?
For those affected by the Car Tax VED Rise, there are a few options, according to Yahoo:
- Check eligibility for historic tax exemptions: Vehicles over 40 years old qualify for VED exemption, but owners must apply for this status.
- Consider selling older vehicles: With rising tax costs, some owners may opt to sell their cars and switch to newer, more fuel-efficient models.
- Explore alternative payment methods: Direct Debit options are available, though they may result in higher overall costs.
Conclusion
The Car Tax VED Rise for older vehicles is part of a broader effort to modernize the UK’s tax system and encourage the transition to low-emission vehicles. While classic cars over 40 years old remain exempt, those registered between 1985 and 2001 will see higher road tax fees based on engine size rather than emissions.
As the government continues to adjust tax policies, affected motorists must stay informed and consider their options. Whether applying for historic tax exemptions, selling older vehicles, or preparing for future tax increases, understanding these changes is crucial for UK drivers.
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