Road Tax Changes From April 2017 - Here's How You Can Save Money
Road tax, also known as VED (Vehicle Excise Duty), is set to change from 1 April 2017, according to the Government.
The changes were first announced in 2015 by then-Chancellor George Osborne. Vehicles registered before 1 April 2017 will not be affected by the changes. Cars registered afterward, though, will.
A tax revolution based on emissions
Any tax changes that affects the motor industry is sure to generate headlines, but this update is different from previous changes in duty.
It was cited as a road tax revolution when first announced in 2015, with car owners set to pay more (or less) depending on the CO2 emissions their vehicle produces from this April. Currently, road tax is based purely on emissions, with the car’s value not taken into account.
Cars that emit up to 100g/km of CO2 are exempt from paying any road tax. Smaller amounts of tax are paid for cars that emit between 101-120g/km of CO2.
From 121g/km of CO2 and higher, drivers begin to pay significantly more tax, with emission figures split into 13 bands. For new vehicles registered after 1 April this year, that’s set to change.
What the changes mean for car owners
From 1 April, cars will only be exempt from road tax if they emit zero emissions and the value of the car is under £40,000.
When a new vehicle is registered from 1 April, cars will still be divided into the 13 previously mentioned CO2 bands. A new three-band system is being introduced for the second year of ownership, though, which rates vehicles as Zero Emission, Standard and Premium.
Most petrol, diesel and hybrid vehicles costing less than £40,000 will all pay that standard flat rate of £140 a year. Premium cars (that cost more than £40,000) will also pay an additional five-year supplement of £310 every year, too.
How you can save money from April 2017
There are no blurred lines here. If you see a car for £39,000 and choose some options that take it over £40,000, you’ll be paying that premium rate of tax.
What Car? has also done some research and discovered that a zero-emission Tesla Model S 60 that pays no road tax today will pay a whopping £930 over three years if registered after 1 April thanks to that premium charge.
Remember though, that’s true for new cars registered after 1 April. There’s still time to avoid those new costs and save money on future road tax by investing in a car before then.
Drivers looking at certain, more powerful models under the £40,000 threshold may also actually end up paying less road tax, depending on the car they choose.
Balgores can help you choose the right car and advise you on any changes to future car tax legislation. Find out more by contacting us online or by calling 01708 384451
CURRENT ROAD TAX
Cars Registered MARCH 2001 - MARCH 2017
|Co2 EMISSION (g/km)||FIRST YEAR RATE||
|Up to 100||£0||£0|
NEW ROAD TAX
Cars registered from 2017
|Co2 EMISSION (g/km)||FIRST YEAR RATE||STANDARD RATE*|
*cars over £40,000 pay £310 supplement per annum