New car tax bands are 'step backwards' as drivers face £5,940 VED charge

Car tax changes launching within months which could see drivers pay £5,490 are a 'step backwards', it has been warned. Rachel Reeves, the new Labour Party government Chancellor, has been blasted over a planned Vehicle Excise Duty (VED) shake up.

Ms Reeves unveiled the Autumn Budget at the end of October and announced a host of major changes. People who buy the most polluting petrol and diesel cars (over 255g/km) from April 1, 2025, are expected to fork out £5,490 when rates double next year.

Marc Cal Din, founder of EV Charger Installation, warned drivers of incoming car tax changes set to launch within the next six months as motorists could face higher bills. He continued, saying: "As EV adoption grows, it’s essential to maintain financial incentives for drivers.

READ MORE: New DWP Cost of Living payments 'activated' and will land in bank accounts

READ MORE: State pensioners will wake up to £621 missing from bank accounts

READ MORE UK faces 1 inch snow per hour this week with three parts of England worst-hit

"This tax change feels like a step backwards, and it risks making EVs less accessible at a time when the UK is committed to phasing out petrol and diesel vehicles." Cal Din added: "Reducing VAT on public charging would encourage EV use across all demographics, especially those without private charging options.

"As we aim for a cleaner, more accessible transport system, policies need to support drivers and remove barriers to EV ownership." The Budget document reveals that all zero-emission electric cars will pay the lowest first-year tax rate - commonly referred to as the 'showroom tax' - of just £10.

This will be retained until 2029-30 to incentivise drivers to switch to greener cars, with the Labour government standing by its manifesto promise to ban the sale of new petrol and diesels in 2030. To also encourage motorists to buy hybrid models in the interim, new examples with emissions between 1 and 50g/km CO2 (which is achieved only by plug-in hybrid models) next year will be subject to £110 first-year VED rates