The UK government will be implementing significant changes to Vehicle Excise Duty (VED) starting 1st April 2025. These changes will affect new cars, and for the first time, will apply to new electric vehicles (EVs) as well as internal combustion engine (ICE) vehicles.
CO₂ Emissions | New VED Rate | Previous VED Rate |
0g/km CO₂ | £10 | £0 |
1–50g/km CO₂ | £110 | £10 |
51–75g/km CO₂ | £130 | £30 |
76–90g/km CO₂ | £270 | £135 |
91–100g/km CO₂ | £350 | £175 |
101–110g/km CO₂ | £390 | £195 |
111–130g/km CO₂ | £440 | £220 |
131–150g/km CO₂ | £540 | £270 |
151–170g/km CO₂ | £1,360 | £680 |
171–190g/km CO₂ | £2,190 | £1,095 |
191–225g/km CO₂ | £3,300 | £1,650 |
226–255g/km CO₂ | £4,680 | £2,340 |
Over 255g/km CO₂ | £5,490 | £2,745 |
The Expensive Car Supplement, sometimes referred to as the luxury car tax, is an additional tax put on vehicles with a list price exceeding £40,000.
This supplement will affect all vehicles. EVs used to be exempt from this type of charge, but from April 1st 2025 they will incur this tax increase.
Owners of premium cars will pay an extra £425 per year for five years, beginning the second year of registration - on top of the standard annual VED rate of £195.
It’s important to note the term list price, which means even if you purchase the car for less through dealer discounts, if the original manufacturer’s list price exceeds £40,000, you will still be subject to the Expensive Car Supplement.
One of the major changes this 2025 VED increase brings is the effect it will have on EVs. Owners of expensive EVs will now pay £620 per year, after the second year of registration until the fifth year, when totalling the costs of the standard VED rate of £195 plus the £425 Expensive Car Supplement.
The government also announced significant changes to the taxation of double cab pickup vehicles, such as the Ford Ranger. Whilst these versatile vehicles were once classified as good vehicles, they will be treated as company cars for tax purposes as of April 6th 2025.
Good news is, for those who purchase, lease, or order a double cab pickup before April will be subject to the previous tax treatment. This will apply to the earlier of disposal, lease expiry, or April 2029.
Get Your Ford Ranger Before the New Tax Increases
There's never been a better time to purchase a new car from TCH Ford. Get behind the wheel of a brand new car before April 1st to avoid paying the higher tax rate for the upcoming year.