DVLA issues urgent notice for incoming car tax changes that will see drivers pay an extra £600 a year

New car tax changes are coming into force earlier than we may have liked, but what do they mean? How much will your car tax be?

The DVLA has issued an urgent warning to UK drivers about upcoming car tax changes that could see many paying up to £600 extra per year! From April 2025, electric vehicle (EV) owners, who currently benefit from zero or low road tax, will be affected by these changes. 

Under the new rules, EVs and low-emission vehicles, which have been exempt from Vehicle Excise Duty (VED) or placed in low-cost bands, will start to incur the same tax rates as petrol and diesel cars. This move is part of a government initiative to create a fairer system for all drivers.

Automatic gearbox

For vehicles registered after April 2025, new electric cars will pay the first-year VED, followed by the standard rate, which is currently £190 annually according to Express. Even older electric models, some registered as far back as 2001, will be affected, with many moving into bands where they will start paying road tax, says GB News. Additionally, electric cars priced over £40,000 will also face a “luxury car tax”, adding further costs to EV ownership​.

Manual gearbox

These changes are seen as part of the government’s broader shift towards aligning road tax systems, but they come as a blow to many who invested in EVs for their cost-saving potential. As a result, many drivers will need to reassess their vehicle budgets, with some estimates predicting a total increase of around £600 a year​.

Erin Baker, editorial director at Auto Trader, said the luxury car tax probably wouldn’t have had an impact on motorists since 2017, but that could soon change.

She added: “With two-thirds of all electric vehicles having a price point of over £40,000 this will make switching to a zero-emissions vehicle less appealing knowing that road taxes are higher, on top of the initial investment.

“However, for drivers that are looking at making the switch to an electric vehicle over the next few years and are concerned about not only the upfront cost as well as the newly implemented vehicle tax costs, car leasing is a good option to consider.”

The expert highlighted how electric vehicles do offer benefit for motorists thanks to lower ownership costs as they can be more economical than a petrol car.

This is a significant shift, and it will likely impact many drivers who have chosen these vehicles for their lower tax rates.

Do you think this will affect the adoption of EVs and low-emission vehicles?

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