By purchasing a new vehicle before 1st April 2017 you can avoid the road tax increase.
As of April 1st 2017, the way in which Vehicle Excise Duty (VED) is calculated will be changing.
VED - sometimes known as road tax - is administered by the DVLA and is the annual tax on the ownership of most road vehicles. This is a duty which has to be paid in order for vehicles to be used or parked on public roads.
Currently the way in which VED rates are calculated is based on the engine size, or fuel type and CO2 emissions depending on the registration date of the vehicle. Once these changes come into practice, the new tax rates will not affect vehicles already registered before April 1st 2017, which is good news if you're looking to buy a used or new car for delivery before that date, as you won't be affected by increased charges.
Vehicles registered on and after April 1st 2017 will be taxed on a first-year rate which is based on the CO2 emission band applicable to the car and they will also incur a standard fee of £140 in the following years.
In addition to this, any vehicle with a list price over £40,000 will incur an additional charge of £310 per annum for the next five years. This means that vehicles registered from 1st April 2017 with a list price over £40,000 will pay £450 for the next five years, after which they will revert to the standard rate of £140 per year for year six and onwards.
If you are buying a vehicle that is registered on or after April 1st 2017, you will be charged based on the CO2 emissions bandings applicable to that vehicle. The second year and thereafter, the standard rate of £140 per year will apply unless the list price was over £40,000. The table below shows the differences in charges in detail.
The list price refers to the manufacturer's recommended retail price, not the price paid for the vehicle, including any additional extras fitted. Going forward the new scheme will follow a three-tier system classifying which tax rates will apply to which vehicles.
1: Zero emission vehicles under £40,000 are exempt from the new tax.
2: Petrol and diesel engines with a list price of up to £40,000 that emit 1g/km CO2 and above, will be charged a VED rate of £140 from its second registered year.
3: Petrol and diesel engines with a list price of £40,000 and above, including zero emission vehicles, will be charged a VED rate of £450 from its second registered year. After 5 years of being registered, this tax amount will revert and decrease to £140.
The new tax will not apply to vehicles registered before April 1st 2017, nor will it apply to commercial vehicles, HGVs and motorbikes.
If you're looking to purchase a new vehicle from one of our retailers, we would encourage you to act now and avoid being affected by the rising tax costs. In addition, now is a great time to consider an efficient model which could be beneficial in the long term, so why not visit your local Stratstone retailer and find out about the environmentally friendly range.
Beat the rising road tax and act now.
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