The present system for taxing a new vehicle in the UK is about to be changed on the 1 st of April 2017. In the summer of 2016, George Osborne the Chancellor of the Exchequer at the time announced a radical overhaul of the road tax system known as Vehicle Excise Duty or VED, which will make some vehicles a lot more expensive to run.
At present, tax is calculated solely by CO2 emissions, and the value of a car is not taken into consideration. Cars that emit up to 100g/km of CO2 pay no tax at all, and cars that emit between 101-120g/km of CO2 pay small amounts of money, it is not until you get to emissions of 121g/km of CO2 that you start to pay a high amount for tax.
The amount you pay will still partly be based on your car’s CO2 emissions. New cars will still be separated into 13 different CO2 emission bands, which will decide how much you pay in the first year of ownership. Only zero emission cars, such as electric vehicles will qualify for the lowest tax band and thus cost £0 to tax.
From the second year onwards, vehicles that have zero CO2 emissions and cost less than £40,000 new remain free of tax, while a flat rate if £140 a year will be payable for all petrol, diesel and hybrid vehicles that are under £40,000. Any cars over the value of £40,000 will incur a premium fee of £310 for years 2 to 5 of ownership, regardless of what the CO2 emissions are. This essentially means that electric cars over £40,000 and would normally qualify for free road tax every year will no longer be the money saving option they presently are in year one. It is worth bearing in mind that it’s the final list price of your car that will determine the £40,000 threshold.
On your right hand side you can find a full table outlining how much you will need to pay in the first year, and in the years thereafter:
In short yes, as if you buy your new car before the 1st of April 2017, you will not be affected by the vehicle tax changes because they only apply to cars registered on or after that specific date. Your tax will continue to be calculated using the old tax system meaning in most cases you will be better off and will be saving money. However the amount of money that you save does all depend on the type of new car that you’re buying. The new rules still make it financially rewarding to own a pure electric car such as the Hyundai Ioniq as you will still pay no car tax.
CO2 emissions: 98g/km
BUY NOW AND SAVE £400 OVER THREE YEARS
Current legislation:
Cost over 3 years: £0
New Legislation (1st April 2017):
Cost over 3 years: £400
CO2 emissions: 99g/km
BUY NOW AND SAVE £400 OVER THREE YEARS
Current legislation:
Cost over 3 years: £0
New Legislation (1st April 2017):
Cost over 3 years: £400
CO2 emissions: 92g/km
BUY NOW AND SAVE £400 OVER THREE YEARS
Current legislation:
Cost over 3 years: £0
New Legislation (1st April 2017):
Cost over 3 years: £400