From April 1, the annual rate for all petrol and diesel cars registered after April 1 2017 will increase from £140 to £145 although the £10 hybrid discount will remain. The first-year rates on new cars will rise in line with the retail price index, meaning increases of up to £65 for the most polluting models. The supplement on cars with a list price of over £40,000 will also rise to £320 per year on for five years.
VED, or car tax, is set to increase in line with inflation in April 2019. This reflects changes brought in by the Chancellor in the 2018 Budget. Whilst the VED system was significantly reformed in 2017, this is the first year that drivers will see inflationary rises.