From April 1st, 2025, the Vehicle Excise Duty (VED) for new petrol and diesel cars will double, aiming to encourage the purchase of electric and zero-emission vehicles. The tax increase, dubbed a 'showroom tax', will see the annual charge for some models reach up to £5,490, while new EVs will only cost £10 to tax.
From 1 April 2025 'showroom tax' on new petrols/diesels will be doubled. Here's how changes to Vehicle Excise Duty will hit the 10 most popular new carsCar tax changes introduced in April will see the cost of first-year Vehicle Excise Duty for all new petrol and diesel models double, stinging the most polluting cars with an annual charge as high as £5,490.
Experts have labelled it a stealth tax on new petrol and diesel cars and a 'shove, not a nudge' towards EV uptake.This is Money has crunched the data on the 10 best sellers of 2024 and the spread of first-year road tax costs from 1 April 2025.10.
At the opposite end of the spectrum, the biggest emitter is the Polo GTI, with a 2.0-litre turbo petrol producing 204bhp and using a seven-speed automatic gearbox. All zero-emission electric cars, including Tesla's Model Y, will pay the lowest showroom tax rate of just £10. A luxury car tax currently exists for any brand-new model across all fuel types with a list price of £40,000 or more.
This means from year two to six, the road tax bill for every Tesla Model Y will be £605 annually - or £3,025 over a half-decade period of ownership. It's also said to return an official fuel economy of 946.1mpg, though only if it's fully charged and you're driving a limited distance away from motorways.
Today's first-year VED cost for this model is £1,650, but from next year it will increase by 100 per cent to a whopping £3,300.First-year tax costs: £110 - £2,190 The former is the least emitting of all, producing just 12g/km. The cheapest trim - the SE Plug-in Hybrid Auto 2 Speed - costs £31,495 and will reward buyers with first-year VED costs of just £110. However, this is a £100 hike compared to the £10 showroom tax that currently exists.
In contrast, some petrol and conventional hybrid engine options put out 158g/km CO2. The cheapest option of these is the 1.6T 160PS 6 Speed Manual 2WD N Line S, which starts from £34,500. At the opposite end of the spectrum is VW's all-wheel drive Golf R hot hatch. In 2.0 TSI petrol 4Motion 333PS 7-speed DSG auto trim - costing £45,785 - it emits a combined 186g/km CO2.
The least-emitting powertrain is the 1.6-litre hybrid 143 N-Connecta, which costs £29,095. The conventional self-charging drivetrain puts out 109g/km CO2. Being an alternative fuel model, this qualifies it for a showroom tax rate of £185 today, though this will double to £370 from 1 April. It puts out combined CO2 emissions of 116g/km, which - inclusive of the alternative-fuel vehicle VED subsidy - means it currently costs £210 to tax for the initial 12 months. From 1 April 2025, though, this rises to £420.
Should Kia dealers have a strong December, it could overtake the current leader to become the nation's favourite - the Sportage is only 84 registrations shy of the motor in number one spot.
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