You’ve probably seen the scaremongering headlines warning that drivers face a ‘significant hit’ (thank you Daily Express) come April Fools Day when new road tax regulations come into play, but what is the truth about the VED rise and how will it affect classic and modern classic owners?
The biggest impact will be for anyone buying brand new from the showrooms – even those opting for an electric vehicle, who will now have to pay a tenner instead of getting away scott free.
It’s the most expensive and highest-polluting cars which will be hammered thanks to a doubling of VED for cars emitting more than 75g of CO2 per km. At the highest level (above 255g/km) buyers will have to pay a whopping £5,490 in the first year.
What’s more, there’s a so-called “luxury car supplement” charged for cars with a list price above £40,000. That’s payable for the next four years and comes in at £450 for a petrol or diesel, £440 for an alternative-fueled car, and £310 for EVs. Oh, and that’s on top of a new standard rate of £190 for petrol or diesel cars and £180 for alternative fueled vehicles. Zero emissions EVs have a standard rate of £10. You can find the full list of vehicle tax rates here.
For older cars, including modern classics registered between 1 March 2001 and 31 March 2017 the system is still based on emissions, and those emitting less than 100g/km will still pay nothing, while for everybody else there’s a £10 increase compared to 2024. That means owners of older cars emitting more than 255g/km of CO2 will pay £735 a year for the privilege of driving on Britain’s beautifully-maintained road network. Ahem.
Cars registered before 1 March 2001, that were still younger than 40 years old on 1 January 2025, are charged based on engine capacity. That’s £210 a year for those under 1,549cc and £345 for anything above.
The Government considers any car older than those to be a “historic vehicle” and is therefore exempt from paying road tax, or, indeed, being required to have an annual MOT test. You can find out how to apply here. It’s literally the only time, as the owner of a 1982 Lotus Esprit that I actually save money.
