Car Tax Changes 2024: Vehicle Excise Duty, Bands Explanation, Where to pay?

Vehicle Excise Duty (VED) will affect all cars, new and old, except the cleanest ones, effective April 1st, 2024. This thorough analysis will provide you with the knowledge you need to prepare for and successfully manage these changes. 

Car Tax Changes 2024

Vehicle Excise Duty (VED) on the majority of new and used automobiles will rise by around 6% from April 1st, 2024, in line with inflation as measured by the Retail Price Index (RPI). The objective of this modification is to maintain equity and sustainability in the automobile sector. 

The majority of drivers will see a little increase in their yearly cost of £5 to £10, but it’s crucial to remember that those who own newer cars with greater CO2 emissions will pay a more significant £140 increase in the first year. 

Electric vehicles (EVs) will no longer be free from Vehicle Excise Duty (VED) as of April 2025. Instead, they will be charged the subsequent lowest first-year rate, presently £10. 

Furthermore, in April 2024, the standard VED for electric vehicles (EVs) will rise marginally from £180 to £190, with further increases anticipated until 2025. In addition, EVs costing more than £40,000 will have to pay an extra yearly levy from years two through six. 

UK Car Tax Bands Explained

Depending on when the vehicle was initially registered, the engine size, fuel type, and carbon dioxide (CO2) emissions are used to determine the vehicle tax band. 

The rates are divided into many CO2 bands for automobiles registered on or after 1 March 2001 or 1 April 2017; the lower the tailpipe emissions, the lower the vehicle tax.

A valid MOT is required if the vehicle is older than three years old, and appropriate auto insurance coverage must be in place before the vehicle may be taxed. Your application for automobile tax is electronically verified for both.

Car Tax Changes 2024

How do I pay for my car tax?

Online payment is by far the most convenient method for paying road tax. A reference number from one of the following papers is required to tax your vehicle:

  • A recent DVLA vehicle logbook (V5C) “last chance” warning letter reminder (V11) in your name
  • a green, fresh keeper addendum (V5C/2) taken from the logbook of a recently purchased vehicle.
  • You may pay with a credit card, debit card, or direct debit using this very simple procedure.

How much is my car tax in 2024?

In 2024, the flat rate cost of vehicle tax is £190. The Chancellor of the Exchequer announced in the Spring Budget 2024 that Vehicle Excise Duty (VED) will rise per inflation, as determined by the Retail Price Index (RPI). This indicates that on April 1, 2024, the rates for road taxes for millions of drivers increased.

If the automobile was used for the first time before 2017, you can pay less or more. The year your automobile was first registered and the kind of gasoline it runs will determine the precise amount of your yearly road tax. 

Many electric vehicles are exempt from road tax; however, this will change in 2025 when EVs will be subject to VED taxes for the first time. See our guide to road taxes for electric cars for further information on VED for EVs. 

How Do I find out the tax band for my car?

To determine the tax band, you will need to know the year that your automobile was registered. To do this, locate the date of the car’s initial registration on page one of the V5C logbook for your vehicle. You can determine the car’s precise tax band and annual cost after you know the year it was initially registered.

What happens if I don’t tax my car?

If you are the registered owner of an untaxed car, you will get a letter from the Late Licence Penalty (LLP). If payment is made within 33 days, the £80 fine might be lowered to £40. 

Should you neglect to make payments, a debt collection agency will be contacted. The OCS is thirty pounds plus 1.5 times the current amount of overdue car tax.

If this is not paid, a magistrates’ court may hear the matter and impose a fine of £1,000 or five times the amount that is owed, whichever is higher. If you are found operating or maintaining an untaxed car on a public road while a SORN is in effect, the fine rises to £2,500.

If the car is clamped in either scenario, the owner will have to pay a £100 clamp release charge within the first 24 hours. The cost rises to £200 if the car is removed, and there’s also a daily storage charge of £21 when the car is taken to the vehicle pound.

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