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Car tax increases 2024: Rates and how much drivers will be paying revealed

4 January 2024, 12:32

By Hope Wilson

The Government have announced an increase in car tax which will begin later this year.

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Owners of older vehicles will face a fresh tax hike in spring, meaning some drivers could be paying over £100 more to use the roads.

Vehicle Excise Duty (VED) rates will increase on 1st of April this year, with the finance experts at Pete Barden predicting that those whom this rule applies to may see an increase of just under six percent.

How much drivers will pay in tax will depend on how 'green' their vehicle is, with high-polluting models facing a higher level of tax.

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VED is based on how old a car is, the type of fuel it uses, CO2 emissions and list price, to determine how much tax the owner will need to pay.

Drivers could be facing a tax hike. Picture: Alamy

The Treasury explained: "The Government will uprate VED rates for cars, vans and motorcycles in line with RPI from April 1, 2024 in the Autumn Finance Bill 2023.

"To support the haulage sector, VED for HGVs and the HGV levy will both remain at 2023-24 rates for 2024-25."

Electric vehicles are not required to pay VED, however this is set to change in April 2025. Owners of electric cars will be charged £10 a year, however from the second year of registration, they will be charged £165 a year.