Home » News » Tax change means buying a new van will cost £1,732 more from April

Tax change means buying a new van will cost £1,732 more from April

January 8, 2025

New van buyers are set to spend an average of £1,732 more on Vehicle Excise Duty (VED) from April, thanks to new higher road tax rates for vans.

The increase, announced in last year’s Autumn Budget, is expected to cost van drivers an additional £15.5m during the first six months of the new tax year - based on the 2024 sales volumes.

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The higher VED first-year rates, commonly referred to as “showroom tax,” are based on a vehicle’s CO2 emissions, meaning diesel van buyers will bear the brunt of the increase.

The study, conducted by comparison site Go.Compare, predicts that new diesel van buyers could face an average tax hike of £1,807 per vehicle.

Overall, the sector is projected to contribute an extra £14.2m to the government in the first six months of the 2025/26 financial year.

Petrol van buyers will see the second-highest rise, with an average increase of £1,354 per vehicle, amounting to £1.2m in additional taxes.

However, those opting for greener alternatives such as hybrid or electric vans will have significantly smaller increases.

Hybrid van buyers are expected to pay an extra £252 on average, while those choosing fully electric vans will see a modest £10 rise.

Breakdown of VED Cost Increases by fuel type

Fuel TypeTotal Extra Cost (April–September 2025)Increase per Van
Diesel£14,272,190£1,807.75
Petrol£1,227,485£1,354.84
Hybrid Electric£6,815£252.41
Battery Electric£1,240£10.00

Tom Banks, motoring expert at Go.Compare, advised prospective van buyers to consider their options carefully. “The increased VED rates will result in a big hit if you buy a brand-new van later this year, but there are things you can do to absorb the blow,” he said.

Banks highlighted that tax rates are based on CO2 emissions, making this an opportune moment to switch to a van powered by cleaner fuels. For those unable to opt for a hybrid or electric vehicle, he suggested exploring alternatives like “nearly new” vans to avoid the increased tax.

Additionally, Banks recommended finding other ways to cut motoring costs. “Comparing van insurance policies might help you find a provider offering the same amount of protection for less, and maximizing your fuel economy could help to counteract the higher tax,” he said.

As the April tax hike approaches, van buyers are being urged to weigh their options and plan ahead to mitigate the impact of the rising costs.

Written by: George Barrow 

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