Car Tax Increase 2024: UK Car Tax Changes Coming 2024, All You Should Know
Learn more about the 2024 Car Tax Increase in the UK and the upcoming changes to Vehicle Excise Duty (VED). The adjustments in tax rates will impact car owners and families with vehicle loans. This article provides comprehensive details about the impending Car Tax Increase.
Car Tax Increase 2024
Vehicle Excise Duty (car tax) is a fee paid for both commercial and personal vehicle ownership. Like other taxes, it undergoes adjustments tied to inflation and the Cost of Living. The rates have consistently risen since 2010.
Scheduled for implementation on April 1, 2024, the tax rate increase will be determined by the Retail Price Index, resulting in a 6 percent rise from the initial margin. Notably, electric vehicles will also now be included in the Vehicle Excise Duty starting this year. Explore further details about the 2024 Car Tax Increase below.
What is Vehicle Excise Duty?
The tax rate is factored into the retail prices of various vehicles, including bikes, cars, trucks, and buses. These taxes are also integrated into vehicle licenses. Additionally, trading and transportation for exports will now be encompassed within the Vehicle Excise Duty (VED).
The Vehicle Excise Duty (VED) calculation considers factors such as the car’s age, CO2 emissions, fuel type, and price list. Tax rate adjustments typically occur semi-annually or annually. For new cars, the first-year rate is based on a flat annual income, and from the second year onward, the VED receipt is required. Renewal of tax policies is necessary every six months, contingent on the amount of tax paid.
UK Car Tax Changes Coming 2024
Payment of the VED with The CO2 Emission for the first year
Co2 Emission | Standard Amount | All Other Diesel Cars |
0 | 0 | 10 |
1-50 | 10 | 30 |
51-75 | 30 | 130 |
76- 90 | 130 | 165 |
91-100 | 165 | 185 |
101-110 | 185 | 210 |
111-130 | 210 | 225 |
131-150 | 225 | 645 |
151-170 | 645 | 1040 |
171-190 | 1040 | 1565 |
191-225 | 1565 | 2605 |
225+ | 2605 | 2605 |
Rate of the Ved with the Fuel Details
Fuel | Twelve Month Installment | Six Months Installment |
Petrol | £180 | £99 |
Diesel | £180 | £99 |
Alternative Fuels | £170 | £99.70 |
Electric vehicles | £180(expected) | £99(expected ) |
All You Should Know
Starting this year, there’s a shift in the taxation landscape for electric cars. Unlike the previous years when they were exempt, a new legal provision now mandates electric vehicles to pay VED taxes from 2024 onwards. These changes come into effect on the 1st of the month. Notably, electric vehicles registered between May 2017 and April 2024 will be subject to standard tax rates for a duration of one year.
