Car tax changes to hit drivers in days with new £620 charge

The new charges will come into force in April

Drivers across the UK are being warned to prepare for a number of car tax changes due to hit within days - but there will a freeze on fuel duty.

Motorists face losing hundreds next month as vehicle and road taxes are set to change.

EV owners are expected to be particularly hard hit as they were previously exempt from road tax.

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Owners of these cars could be due to pay up to £620 in road tax from April onwards.

Electric vehicles registered between April 1, 2017, and March 31, 2025, face a charge of £195 per year.

EVs purchased after April 1, 2025, will be charged £10 for their first year before being upgraded to the full £195 in the next tax year.

Mike Vousden, Motorpoint’s resident EV expert, said the change has been expected for years.

He said: "At a simple level, as more car owners make the move to electric, the current exemption means that fewer motorists are paying vehicle excise duty (also known as road tax).

"So, there’s less tax being collected from motorists.

"The government is also losing out on fuel duty as EVs don’t require petrol or diesel, which has tax baked into the price at the pump.

"The government has predicted that the loss of these two major sources of motor taxation could result in a ‘£35 billion black hole in finances’ – making the current system unsustainable."

EVs that cost more than £40,000 will also be liable for the £425 Expensive Car Supplement - an annual payment also known as the luxury car tax.

Petrol and diesel car owners are in for a similar rise as the car tax they owe in their first year depends on their engine and how much CO2 it emits.

According to RAC, cars like hybrids which emit less than 50g/km of CO2 will face a £110 VED charge - a £100 rise from the current rate.

New cars emitting between 51 and 75 g/km of CO2 will rise from £30 to £135.

Despite the extra charges, HMRC has confirmed that the 5p per litre cut on fuel duty will be extended.

The cut was originally made in 2022, bringing fuel duty down to 52.95p per litre, with the freeze due to expire this month.

But it has since been extended to March 2026, while a planned increase in line with inflation has also been axed.