We’ve all gotten used to the new concept of not having to display tax discs in our car windows and now we are going to have to get used to more new changes to car tax from April 2017.
There’s a lot of hype at the moment around the said changes, so we wanted to break it down and make it a little simpler and explain exactly what it means to you as a driver…
Car tax currently
At the moment, the amount of road tax you pay is dependent on your car’s C02 (carbon dioxide) emissions.
You pay a certain fee the first year of a new car’s registration and a second annual payment for each year your car is on the road.
A car that emits less than 100g/km (carbon dioxide) is exempt from both payments at present.
Car tax changes
From April 2017 things are going to be a little different.
The first year, the fee will be based on one of 13 bands that the car falls in to and will cost anything from £0 – £2,00.
For the second year, cars will be divided in to 3 bands – zero, standard and premium. A zero emissions car (costing under 40k) will pay NO tax whatsoever but standard cars will cost a flat fee of £140 from year two (some cars that are currently charged £0 a year in tax or even £20/£30 will be paying £140 from the new tax year and will not benefit from having a low emission car unless it’s literally 0)
A car that emits any C02 at all and costs over 40k will cost £450 in taxes from year two until the sixth year after registration, when it will go back down to £140 again.
The rates will only be charged to cars newly registered after April 2017 (cars already on the road will stay the same)…
…But just a heads up if you are looking to purchase a new car towards the end of this year or the beginning of 2017, you may wish to be more tactical as to when you buy it.
Winners and Losers
In plain and simple terms – a car that is C02 rated at 100g/km or less and thus currently pays £0 tax under the existing VED band system will hugely go up from 2017 and will no longer be exempt from tax.
On the other hand, a reasonably priced car rated at 226g/km of C02 or above will be on to a winner, and you’ll make huge savings if you purchase after the new tax laws hit.
Car tax is back
It has also been announced that money raised from these VED payments will be put in to a road fund…so essentially road tax is being re-introduced.
We hope this is useful to you, and we are happy to give you any advice on when is best to purchase a new car and how this could potentially affect you.
Just give us a buzz or pop in.