Car tax changes introduced in April will see the cost of first-year Vehicle Excise Duty (VED) for all new petrol and diesel models double, stinging the most polluting cars with an annual charge as high as £5,490.
The tax raid on new combustion engine motors was confirmed in Rachel Reeves' Autumn Budget in October.
The Chancellor said VED (commonly referred to as road tax or car tax) first-year rates for cars registered after 1 April 2025 will be adjusted to 'strengthen incentives to purchase zero emission and electric cars, by widening the differentials between zero emission, hybrid and internal combustion engine cars'.
However, the supporting Budget document revealed that Ms Reeves' plot to extend the tax gap to greener vehicles would be achieved by doubling first-year VED rates - also known as 'showroom tax' - for petrol, diesel and many hybrid cars while costs for new EVs will rise from zero to just £10.
Experts have labelled it a stealth tax on new petrol and diesel cars and a 'shove, not a nudge' towards EV uptake.
So, how will these new rules impact the nation's most popular new cars?
This is Money has crunched the data on the 10 best sellers of 2024 (up to the end of November) and the spread of first-year road tax costs from 1 April 2025.
The priciest will cost £3,300 to tax for 12 months.
CO2 (g/km) | Petrol & diesel cars now | Petrol & diesel cars from 1 April 2025 | Alternative fuel (self-charging and plug-in hybrid) cars now | Alternative fuel (self-charging and plug-in hybrid) cars from 1 April 2025 |
---|---|---|---|---|
0 | £0 | £10 | £0 | £10 |
0 50 | 10 | £110 | £0 | £110 |
51 75 | £30 | £130 | £20 | £130 |
76 90 | £135 | £270 | £125 | £250 |
91 100 | £175 | £350 | £165 | £330 |
101 110 | £195 | £390 | £185 | £370 |
111 130 | £220 | £440 | £210 | £420 |
131 150 | £270 | £540 | £260 | £520 |
151 170 | £680 | £1,360 | £670 | £1,340 |
171 190 | £1,095 | £2,190 | £1,085 | £2,170 |
191 255 | £1,650 | £3,300 | £1,640 | £3,280 |
226 255 | £2,340 | £4,680 | £2,330 | £4,660 |
Over 255 | £2,745 | £5,490 | £2,735 | £5,490 |
10. Volkswagen Polo - increase of up to £270
2024 registrations: 27,674
CO2 emissions: 116 - 149g/km
First-year tax costs: £440 - £540
The Volkswagen Polo has been a long-time favourite among British drivers dating back to the arrival of the Mk1 model way back in 1975.
Now in its sixth generation (on sale since 2018), the version with the lowest emissions is the 1.0-litre TSI petrol (109bhp) manual in Life trim, which costs £22,150.
With CO2 emissions of 116g/km, buyers from 1 April 2025 will see the cost of first-year VED increase from £220 to £440.
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.
It puts out 149g/km CO2 in official tests. Based on this figure, buyers will have to fork out an extra £270 in first year VED from next year when the rate doubles to £540.
9. Tesla Model Y - increase of £10
2024 registrations: 27,697
CO2 emissions: 0g/km
First-year tax costs: £10
From 1 April 2025, owners of EVs will - for the first time ever - be forced to pay vehicle excise duty. However, for first-year tax, this won't be much.
All zero-emission electric cars, including Tesla's Model Y, will pay the lowest showroom tax rate of just £10.
This rate will be retained until 2029-30, Reeves confirmed in the Budget. This is to incentivise drivers to switch to greener cars, with the Chancellor standing by Labour's manifesto promise to ban the sale of new petrol and diesels in 2030.
While the Model Y will be cheap to tax in the first year, it will be particularly pricey for the following five years.
While April 2025 VED rules around first-year road tax rates are primarily designed to encourage drivers to buy electric cars, they too are on course to be pummelled by an existing supplementary tax that will impact seven in ten new EVs registered in Britain.
A luxury car tax currently exists for any brand-new model across all fuel types with a list price of £40,000 or more.
With the least expensive Model Y (Long Range Rear-Wheel Drive) priced from £46,990, every example will be hit with this supplementary charge.
The premium tax is applied from the vehicle's second year and currently adds £410 to the VED bill for five years in total. This is likely to rise with RPI from April, though.
EVs are also due to be charged a standard rate of VED (payable every year from year two) for the first time from April under plans first announced by the former Tory regime.
The Government has confirmed a standard VED rate for EVs of £195.
Industry groups are lobbying Rachel Reeves to scrap the luxury car tax for EVs after a market report revealed that 70 per cent of battery vehicles purchased by Britons in the previous 12 months cost in excess of £40k.
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.
A study by car magazine Auto Express earlier this year found that seven in ten new EVs purchased in Britain are over the £40,000 threshold, meaning the premium tax will sting most buyers.
8. Audi A3 - increase of up to £1,650
2024 registrations: 28,105
CO2 emissions: 7 - 213g/km
First-year tax costs: £110 - £3,300
By far the cheapest Audi A3 to tax from 1 April next year will be the brand's plug-in hybrid variant, the '40 TFSI e S-Tronic', which puts out CO2 emissions as low as 7g/km CO2.
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.
Buy one of these cars today - starting from £39,775 in Sport trim - and first-year VED is just £10. However, from 1 April 2025, Reeves has hiked the showroom tax on the greenest cars with combustion engines (those putting out between 1-50g/km CO2) to £110.
But a £100 increase for Audi's plug-in hybrid model pales in comparison to the biggest hike in first-year showroom tax rates for its sportiest A3 variant.
The RS3 (in Carbon Vorsprung TFSI quattro S tronic spec) costs from £69,275, so is far from an inexpensive family hatchback. And it's not particularly green either, with CO2 emissions of 213g/km.
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.
7. MG HS - increase of up to £1,095
2024 registrations: 28,595
CO2 emissions: 12 - 173g/km
First-year tax costs: £110 - £2,190
The MG HS is Britain's most popular budget-friendly family SUV, sitting seventh overall in the car sales charts for 2024.
MG Motor - owned by China's SAIC Motor - has seen a spike in demand in the second half of the year with the arrival of an all-new version with sleeker looks, even more space and the option of a plug-in hybrid variant.
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.
If drivers opt for the petrol automatic choice, which is £5,000 cheaper starting from £26,495 for the SE DCT 7 Speed, CO2 emissions of 173g/km command a showroom tax of £2,190, doubling from £1,095 currently.
This cuts the £5,000 difference between the petrol and plug-in hybrid to just £2,820.
6. Hyundai Tucson - increase of up to £680
2024 registrations: 30,499
CO2 emissions: 22 - 158g/km
First-year tax costs: £110 - £1,360
First launched in 2004, the Tucson is a firm staple on the UK's best-selling list, finishing 2023 as the sixth most popular model.
Now in its fourth generation, it's an accomplished compact family SUV. As such, some 30,500 new Tucsons have already been sold this year.
But there's a big difference in first-year tax rates depending on which fuel type you choose.
The £39,275 Plug-in Hybrid 1.6T 252PS automatic 2WD option is the most expensive of all. However, its green drivetrain produces just 22g/km CO2 in official tests, which qualifies it for a VED showroom tax rate next year of £110, up from £10 at the moment.
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.
If you bought one today, you'd pay just £680 in showroom tax. However, from April this will double to £1,360.
5. Volkswagen Golf - increase of up to £1,095
2024 registrations: 30,964
CO2 emissions: 117 - 186g/km CO2
First-year tax costs: £440 - £2,190
The Golf has been an evergreen favourite among Britons - and across Europe generally - since the first-generation model hit dealerships back in 1974. Today, it's the best-selling conventional family hatchback.
The lowest-emitting Volkswagen Golf currently on sale is the 2.0-litre diesel (in Match 115PS 6-speed manual trim) costing £29,730, which puts out 117g/km CO2. And because it conforms to RDE2 standards (the latest emissions test requirements), it doesn't get moved a tax band higher, meaning a showroom tax cost of £440 - doubling from £220 currently.
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.
Currently, this puts it in a VED showroom tax band that demands a 12-month road tax charge of £1,095. From 1 April 2025, this jumps to £2,190.
4. Nissan Juke - increase of up to £270
2024 registrations: 32,482
CO2 emissions: 109 - 138g/km CO2
First-year tax costs: £370 - £540
Nissan's Juke, which is produced at the North East plant in Sunderland, has been a volume seller since the compact crossover first went on sale in 2010. Now in its second-generation launched in 2019, it received a mid-cycle facelift earlier this year to bring it up to date.
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.
The highest emitting version of Juke is the DiG-T 114 N Sport petrol with the DCT automatic gearbox with an output of 138g/km CO2. This example costs from £29,900.
First-year tax for this particular version will rise from £270 to £540.
3. Nissan Qashqai - increase of up to £680
2024 registrations: 39,047
CO2 emissions: 116 - 157g/km CO2
First-year tax costs: £420 - £1,360
The Qashqai has been a tremendous success for Nissan since it launched in 2007. For the best part of the two decades that have followed, it has been Britain's favourite new family-size SUV. Though the third-generation Qashqai could lose that title this year as it is lagging some 6,500 units behind one of its rival.
Across the Qashqai range, the least emitting version is the hybrid e-Power 2WD version in Acenta Premium specification, costing £34,430.
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.
The highest CO2 output is for the petrol DiGT 158 4WD Xtronic automatic in Tekna+ trim (£42,610). Its emissions of 157g/km CO2 currently demands a first-year tax charge of £680, doubling from April to £1,360.
2. Kia Sportage - increase of up to £270
2024 registrations: 45,454
CO2 emissions: 28 - 149g/km
First-year tax costs: £110 - £540
Kia's Sportage is on course to become the nation's favourite mid-size SUV in 2024, taking over the crown held by Nissan's Qashqai for the last 16 years. A combination of stylish looks, lots of standard equipment and reasonable pricing has seen it rocket up the popularity charts from fourth spot in 2023.
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.
The least emitting variant of Sportage is the 1.6 T-GDi Plug-in Hybrid with all-wheel-drive, which starts from £40,575 in GT-Line trim. Emissions of 28g/km CO2 mean it will be £110 to tax in the first year, up from £10 currently.
The highest emitting version of the family-friendly SUV (1.6T petrol with front-wheel drive) puts out 149g/km CO2, which will see showroom tax rates rise from £270 today to £540 from 1 April.
1. Ford Puma - increase of up to £270
2024 registrations: 45,538
CO2 emissions: 121 - 137g/km
First-year tax costs: £440 - £540
Last year's best-selling new car, the Ford Puma, is leading the way in 2024 - though only just. With 45,538 registrations between January and November, the Kia Sportage is hot on its tailpipe.
From next year, the Puma will succumb to relatively big showroom tax jumps across its range.
The least emitting version today is the 121g/km CO2 1.0-litre 125PS in Titanium trim, starting from £26,060. Buyers can expect to pay an extra £220 to tax a new one next year when the showroom tax for this variant jumps to £440. However, Ford has just revealed its new Puma Electric, which will have low first-year VED costs of £10 when it arrives in showrooms in spring 2025.
The highest CO2 output across the Puma line-up is for the sporty ST. With the addition of a panoramic roof and tow bar, emissions rise to 137g/km. As such, today's £270 first-year VED rate will become £540 by the time 1 April 2025 rolls around.