Drivers of high-performance and luxury cars should prepare for a hefty increase in car tax. Starting in April 2025, a new vehicle excise duty (VED) will apply to 59 specific car models that produce high carbon emissions. These models will be subject to a £2,000 increase in road tax due to their impact on the environment.

What’s Changing?

Under the new tax rules, any car emitting over 255 grams of CO2 per kilometer will face this significant tax hike. This measure is part of a government effort to tackle climate change by reducing carbon emissions. Most people will not see such a large increase, as regular road tax rates will only go up slightly with inflation. However, drivers of high-end, gas-guzzling vehicles, especially those released after April 2025, will see their tax bills double in some cases.

If you’re thinking about buying a high-emission car after April 2025, it’s important to be aware that your first-year road tax could be considerably higher. For example, any car that emits over 75g of CO2 per kilometer may face an initial road tax surge, especially those in the higher CO2 brackets.

Who Will Be Affected?

The tax increase specifically targets luxury and high-performance cars. Some well-known models affected include the Audi R8, Aston Martin DB12, and several high-end SUVs like the Alfa Romeo Stelvio. These vehicles produce higher-than-average emissions, which is why they fall under the new tax category.

Drivers who own these cars will see the highest increases, while standard vehicles will only have a modest rise in tax based on inflation. The government hopes this will encourage people to consider more environmentally-friendly cars and reduce their carbon footprint.

Why the Increase in Car Tax?

This tax hike aims to generate funds for environmental initiatives. The government expects the new car tax adjustments to bring in £400 million in the first year alone, with a long-term goal of collecting around £1.7 billion by the end of the decade. These funds could be used for various climate projects, including incentives for electric vehicles and other green technology advancements.

Moreover, this tax increase is designed to push more people towards electric or low-emission vehicles, as they will remain unaffected by this particular tax hike. Cars with zero emissions are becoming a big part of the government’s plan to address climate change, making electric vehicles a more appealing choice for those looking to avoid high road tax bills.

Future Relief for Electric Vehicle Owners

For those interested in going green, there is good news on the horizon. The government has mentioned a potential plan to make zero-emission cars more affordable. In the budget briefing, there was a hint that the expensive car tax might not apply to electric vehicles in the future. The goal is to encourage people to buy electric cars by making them more affordable and less costly to maintain.

Which Cars Are Included in the High-Tax Category?

The list of cars facing this tax increase includes several popular luxury and sports models. Here are a few examples of the 59 models that will be subject to the new tax:

Alfa Romeo Stelvio 2.9 V6 Bi-Turbo
Audi R8 5.2 FSI V10
Audi RS6 4.0 TFSI V8
Aston Martin DB12 4.0 V8
BMW X5 M 4.4 V8
Ferrari F8 Tributo 3.9 V8
Lamborghini Urus 4.0 V8
Mercedes-AMG GT 4.0 V8
Porsche 911 Turbo 3.8
Rolls-Royce Ghost 6.6 V12

This list contains some of the most powerful and luxurious vehicles on the market. Drivers of these cars will face the largest tax increase, given their higher CO2 emissions.

What Should Drivers Do?

If you already own one of these high-emission vehicles, it’s worth preparing for the extra costs in 2025. Those considering buying a new car may want to explore more fuel-efficient or electric options to avoid these higher taxes. Electric vehicles continue to gain popularity, and the government’s hints of future tax breaks make them an appealing choice. The potential for lower taxes on zero-emission vehicles could save drivers significant money over time and contribute to a cleaner environment.

For drivers of standard cars, the increase in road tax due to inflation is expected to be small and manageable. However, for those who own or plan to buy high-emission cars, the new VED rules could make luxury car ownership more expensive.