DON’T BE AN APRIL FOOL!
BUY A NEW CAR BEFORE 1ST APRIL 2017
1st April 2017 will see an increase for Vehicle Exercise Duty (VED) – road tax on most new vehicles.
If you own or buy a new car registered before 1st April 2017, these changes will not affect you. If you are looking for a brand new car, buying before the end of March 2017 will save paying extra tax (see table below).
The current taxation system is based on CO2 emissions, with the increasing popularity of more fuel efficient petrol and diesel cars the taxman was increasingly loosing out, if the system that ends 1st April 2017 continued, 75% of new cars would have nil road tax by 2017.
Only vehicles with 0g/km CO2 will qualify for nil road tax, and the rest will be divided in to 13 bands based on CO2 emissions..
For example, from 1st April – for a car that has been nil road tax and then £20 in its second year, this same car will cost £140 to tax in the first year as well as every year after. At the end of the three years you will have spent £380 more on than that car than if you bought it before 1st April 2017.
As well as taxation being based on CO2 emissions it will also depend on the list price. A vehicle that costs over £40,000 even if it has 0 CO2 emissions will be liable to an additional £310 tax per year for five years from the end of the first vehicle licence. The subsequent years the tax will go back to the standard rate.
As you can see from the table below, after March the first year of tax is based on a sliding scale, from no road tax for electric and hybrid vehicles up to £2,000 for cars with CO2 emissions over 255g/km. From the second year, every car except zero emissions vehicles moves to the same tax rate of £140.
VEHICLE EXCISE DUTY / ROAD TAX BANDS AND RATES FOR CARS FIRST REGISTERED ON OR AFTER 1ST APRIL 2017
|CO2 Emissions (g/km)||1st Year Rate||Standard Rate*|
*New cars with a list price above £40,000 pay an additional rate of £310 per year for five years on top of the standard rate.