Thinking of buying a new car soon? Changes to road tax on 1 April 2017 could affect the timing of when you actually buy. April sees the introduction of new rates of VED (Vehicle Excise Duty), more commonly known as road tax, for new cars.
The current system encouraged motorists to buy low emission new cars with no tax paid at all on vehicles which produced up to 100g/km CO2. The maximum payable under the current system for the most polluting cars, producing over 255 g/km, is £515.
Under the new rules all cars first registered on or after 1 April 2017 will pay road tax with the only exception being zero emission electric and hydrogen cars.
What are the new rules?
- All cars except zero emission cars will pay road tax in the first year of registration. The amount paid will range from £10 for vehicles in the 1-50 g/km range up to £2,000 for vehicles which produce over 255 g/km.
- After the first year of registration all cars will pay road tax based on their fuel type:
- Electric - £0
- Alternative fuel - £130
?- Petrol /diesel - £140 - After the first year of registration all cars with a list price of more than £40,000 will pay an additional tax of £310 for the next five years in addition to the basic amount of zero, £130 or £140, which is dependent on fuel type. The additional tax for five years of £310 will apply to all cars over £40,000 regardless of fuel type so even zero emission electric cars will pay this additional tax if their list price is over £40,000.
- After the sixth year of registration the additional tax of £310 will no longer be paid and cars with an original list price of more than £40,000 will be taxed according to their fuel type e.g. £140 for petrol cars.
- The new rules only apply to new cars first registered on or after 1 April 2017. Cars first registered up to and including 31st March 2017 will continue to pay road tax according to the existing rules. More information on the new and old road tax rates is available on the government website here.