Chancellor Rachel Reeves’ Spring Statement today (March 26th 2025) introduced several measures directly impacting UK motorists.
Vehicle Excise Duty (VED) Increases
Starting April 1, 2025, VED rates will rise, particularly affecting higher-emission vehicles:
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High-Emission Vehicles: Cars emitting over 255g/km of CO₂ will see first-year VED double from £2,745 to £5,490.
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Electric Vehicles (EVs): Previously exempt, EVs will now incur a first-year VED of £10, increasing to the standard rate of £195 in subsequent years.
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Expensive Car Supplement: Vehicles priced over £40,000 will be subject to an additional £425 annually for five years, up from the previous £410.
Fuel Duty Freeze
The Chancellor extended the fuel duty freeze for another year, maintaining current rates to alleviate the cost-of-living pressures on motorists.
Pothole Repair Funding
Prime Minister Sir Keir Starmer announced a £1.6 billion initiative to address potholes, aiming to reduce motoring costs and improve road conditions.
Implications for Motorists
While the fuel duty freeze offers some relief, the VED increases, especially for high-emission and expensive vehicles, represent significant additional costs. Motorists are encouraged to consider these changes when purchasing new vehicles and to explore lower-emission options to mitigate tax impacts.