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Car tax rates to change in April – here’s how they affect you

Car tax rates to change in April – here’s how they affect you


Car tax rates are due to change in April, bringing with it a series of additional charges to nearly all drivers. It’s categorised into several different ways, with different owners paying different amounts depending on vehicle emissions.

Fortunately enough, we’ve waded through the figures to tell you just how much could be added to your tax.

The Government has announced its 2021 Budget, and with it an increase in Vehicle Excise Duty (VED). This road tax means you’ll have to pay more each year to keep driving your car.

The 2021 Budget also confirms that the planned rise in fuel duty (the tax you pay per-litre of fuel) will be cancelled. Instead, fuel duty will remain at the same level (57.95p per litre) that it has been for the last 10 years.

How will the tax rate changing affect me? 

  • The standard rate of road tax has risen by 3% year-on-year from £150 to £155
  • First year road tax (VED) has been adjusted – The tax rates for cars that produce 0-75g/km of CO2 remains the same (ranging from zero to £25) However cars that produce between 76g/km and 170g/km have seen their VED increase by £5.

  • Cars in the 171-190g/km category will now pay £895 (was £870) and those that produce 191-225g/km will see their tax rise by £30. You will now have to pay an extra £40 to tax a car that produces CO2s of 226-255g/km.
  •  Cars that sit in the over 255g/km group such as the Audi R8 will now pay £2245 in their first year of tax which is a £70 increase.
  • For premium car owners (car with a list price of £40,000 or more) tax will increase from  £325 to £335
  • Fully electric cars will retain their road-tax (VED) exemption as a result of having zero emissions.

Petrol and diesel cars

In truth, it’s not all doom and gloom for most motorists, with cars registered between March 1, 2001 and March 1, 2017 only seeing a small increase added to their annual rate based on their specific emission levels.

Every petrol, diesel and hybrid car will set you back £155 per year to tax which is £5 more than in 2020.

Vehicles with CO2 emissions ranging from 121-130g/km will find their standard rate to be £130, an extra £5 added to the amount they pay.

Meanwhile cars with emissions in the 166-175g/km bracket will pay an additional £10, while those cars sitting in the highest emissions bracket will have £15 added.

Owners of zero-emissions vehicles won’t have to pay a penny extra, however.

Pre-March 1, 2001

Cars registered before March 1, 2001 are taxed based on engine size. Those vehicles with an engine under 1,549cc will be accompanied by a £165 a year tax charge (in total), while those over 1,549cc will cost £270 a year to tax. 

Want to know how to Tax your car? Take a look at our handy guide to discover how much you should be paying and the payment option that’s right for you.