New numbers from Dick Lovett show that drivers of new vehicles could see as much as a 1000% increase in the cost of their first-year road tax costs from April 1st—with owners of the highest CO2-producing vehicles set to be the hardest hit in real cash terms.
If you’ve treated yourself to a shiny new car in the past few years, you’ll be familiar with the higher rate of road tax drivers need to pay in the first-year (this is included within the purchase price of the vehicle).
The rate drivers pay for this first-year all depends on their car’s CO2 emissions—and it rises periodically with inflation.
However, in the Autumn Budget 2024, the Labour government announced quite significant increases to first-year road tax for new car drivers. Not only did they announce increases to the charges new car drivers pay, but they also announced that new EV drivers would be subject to paying road tax for the first time.
From the 1st of April, drivers of all new cars will have to pay an increase in their vehicle excise duty (commonly known as road tax) for the first taxable year of owning their new car (year two)—with the highest CO2-producing vehicles set to be the hardest hit in cash terms.
According to Dick Lovett’s research, the new rules will see the road tax cost double for all new cars emitting CO2 of 76g/km or more.
The government currently classifies ULEVs as any cars that have less than 75 grams of CO2 per kilometre (g/km), and Dick Lovett found that drivers of ULEVs with a CO2 g/km range of 1-50 will see a 1000% cost increase in the amount they pay for first-year road tax, rising from £10 to £110.
ULEV owners with CO2 g/km of 51-75 will see a 333% increase in the amount they pay for first-year road tax, going from £30 to £130.
Motorists with vehicles that emit more than 256g/km of CO2 will see their average road tax rise by 100% from £2,745 in 2024/25 to £5,490 in 2025/26.
See first-year road tax increases for all vehicles (by tax and CO2 bands) in cash and percentage terms below:
| Band | CO2 (g/Km) Range | Avg. Road Tax (1st Year) 24/25 | Avg. Road Tax (1st Year) 25/26 | Avg. Difference | Cost % increase |
| A | 0 | £0 (previously excluded) | £10 | +£10 | – |
| B | 1-50 | £10 | £110 | +£100 | 1000% |
| C | 51-75 | £30 | £130 | +£100 | 333% |
| D | 76-90 | £135 | £270 | +£135 | 100% |
| E | 91-100 | £175 | £350 | +£175 | 100% |
| F | 101-110 | £195 | £390 | +£195 | 100% |
| G | 111-130 | £220 | £440 | +£220 | 100% |
| H | 131-150 | £270 | £540 | +£270 | 100% |
| I | 151-170 | £680 | £1,360 | +£680 | 100% |
| J | 171-190 | £1,095 | £2,190 | +£1,095 | 100% |
| K | 191-225 | £1,650 | £3,300 | +£1,650 | 100% |
| L | 226-255 | £2,340 | £4,680 | +£2,340 | 100% |
| M | 256+ | £2,745 | £5,490 | +£2,745 | 100% |
In the same budget, changes to the expensive car supplement were announced, and from the 1st of April 2025, the tax will rise from £410 to £425 per year, alongside an introduction for EVs over £40,000 (who were previously exempt from the charge).
Currently, electric vehicles are exempt from the luxury vehicle tax, but with the new rules, any EVs priced £40,000 or more and registered after the 1st of April 2025 will also be subject to paying the additional £425 per year.
Therefore, the drivers set to be the hardest hit with the changes from the 1st of April in real cash terms are those with the highest CO2-producing vehicles which cost £40,000 or more when new.
Those with vehicles also subject to the expensive car supplement will stay within three figures on their total tax first-year costs (including the increased expensive car supplement) unless their vehicle produces more than 151 CO2 g/km, at which point the costs increase from £680 to £1,360—a cost increase of an eye-watering £680 compared to the 24/25 tax year. Those that produce more CO2 will see similar 100% increases.
Drivers of luxury vehicles producing more than 256 CO2 g/km will see their first-year road tax costs rise from £2,745 per year to a staggering £5,490—a £2,745 increase compared to the 24/25 tax year.
