Cars registered after 2017 face new Rachel Reeves car tax rise on April 1

 Cars first registered after 2017 will face Rachel Reeves' new car tax bills within weeks, as tax charges come into effect from April 1. Petrol, diesel and electric car owners will be slapped with higher charges this Spring as inflationary Vehicle Excise Duty (VED) rises come into effect.

Owners of new models registered after 2017 are among those affected, with standard VED fees, first-year tax rates and Expensive Car Supplement fees all on the up. VED price rises are set by the Treasury, with the increases confirmed by HMRC after Rachel Reeves' Autumn Statement last year.

The standard VED rate is paid by petrol, diesel and electric cars that are more than a year old and registered after 2017. This charge currently sits at £195 per year, but will rise to £200 on April 1 in a £5 price rise.

However, much higher charges will affect owners of brand new cars, with first-year rates the highest on the road. Owners of brand-new cars emitting over 255g/km of CO2 will pay £5,690 per year from April 1, a £200 rise on the current £5,490 fee.

Meanwhile, cars emitting between 226 and 255g/km also face steep price rises, with bills jumping from £4,660 to £4,850. Prices will jump by a hefty £120 for vehicles emitting between 171 and 190g/km of CO2, as bills jump from £3,300 to £3,420 per year.

Expensive Car Supplement rates are also set to rise, with bills increasing from £425 to £440 from April 1. The Expensive Car Supplement is an additional charge slapped onto cars with a list price of over £40,000.

This includes electric vehicles, although the threshold for EVs will rise to £50,000 from April after tweaks by the Treasury.

HM Revenue and Customs (HMRC) said: "As announced at Budget 2025, the Government will introduce legislation in Finance Bill 2025-26 to uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with the Retail Price Index (RPI) for 2026 to 2027. This will take effect from 1 April 2026."

However, despite the VED hikes, HMRC has admitted that changing the Expensive Car Supplement thresholds will "positively impact" EV owners, but the move will cost the Exchequer £50million.