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How much is car tax rising in April 2023 – and how can you save money?

Vehicle Excise Duty is set to rise this year (Picture: Getty Images/iStockphoto)

Jeremy Hunt’s Spring Budget 2023 made changes that will impact many areas of the economy – from childcare to pensions.

However, some of the significant changes that will affect millions of households in the UK are those he made to all matters motoring.

The Chancellor of the Exchequer promised an extra £200 million to local councils to help fix potholes across Britain as well as cancelling an 11p rise in fuel duty and maintaining last year’s 5p cut for another twelve months.

Nicholas Lyes (RAC head of roads policy) welcomed the change to fuel duty, saying: ‘The cut has given drivers some much-needed relief in what has been the most torrid year ever at the pumps, with price records being broken even after duty was cut.’

‘Given the importance of driving for consumers and businesses, duty should be kept low to help fight inflation.’

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However, it wasn’t all good news for motorists – Vehicle Excise Duty (VED) will be increasing.

This comes after Mr Hunt’s announcement back in November of last year that owners of electric vehicles will have to pay VED, saying the move was made ‘to make our motoring tax system fairer.’

VED (also known as car tax or road tax) is a significant source of revenue for the government, putting vast sums into government coffers every year.

But just how much is it increasing?

Here is what you need to know.

How much is car tax rising in April 2023?

Vehicle Excise Duty will increase in line with the Retail Price Index (RPI) inflation of 10.1% from April 1, 2023.

However, to help support the haulage sector, VED on Heavy Goods Vehicles (HGVs) will remain frozen for 2023-2024.

How can you save money on car tax?

While car or road tax can prove costly, there are ways to save.

Vehicle Excise Duty Is broken down into various ‘bands’ that range from £0 to in band A to the most expensive category of band M.

Do you know which band your vehicle is in? (Picture: Getty Images)

How much you pay depends on a number of factors, ranging from your engine size and fuel type to when your car was first registered – if your emissions are lower, you pay less tax.

You can check which band you are in and how much you are likely to pay at the Government website.

However, according to, ‘If you have a car in band D upwards, you have the option to pay your tax annually, every six months or monthly.’

‘The cheapest way is to pay for the whole year upfront.’

‘You can also pay by Direct Debit. Except for the single annual payment, you can save a few extra quid this way, though the cheapest is still paying upfront for the whole year.’

MORE : Jeremy Hunt unveils £5,000,000,000 childcare pledge in Budget

MORE : How will the spring Budget affect you? Our expert explains all you need to know

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