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Car Tax shakeup for New cars

March, 15 2017

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On the 1st April 2017 the way vehicle tax is calculated will change for new cars and some motorhomes - this is a big shake up of the existing system.

Car Tax shakeup for New cars

George Osborne instigated the changes which will mean that more tax will be collected in the first year of registration where tax will be based on emissions. Prior to this change it is estimated that a quarter of new cars registered didn't pay any road tax at all as they fell into Band A (vehicles with CO2 emissions of less than 100 (g/km)). This will change with petrol and diesel cars with emissions between 1 and 100 (g/km) paying up to £120 in the first year and £140 in subsequent years. For petrol and diesel cars, the first year's car tax was £0 for emissions up to 130 (g/km).

1 April 2017 New Cars First Year Road Tax

CO2 emissions (g/km) Petrol (TC48) and diesel cars (TC49) Alternative fuel cars (TC59)
0 £0 £0
1 - 50 £10 £0
51 75 £25 £15
76 - 90 £100 £90
91 - 100 £120 £110
101 - 110 £140 £130
111 - 130 £160 £150
131 - 150 £200 £190
151 - 170 £500 £490
171 - 190 £800 £790
191 - 225 £1,200 £1,190
226 - 255 £1,700 £1,690
Over 255 £2,000 £1,990
  • For subsequent years, there will be a flat rate of £140 (hybrids or cars that run on LPG or bioethanol will pay £130 per year).
  • Only electric and hydrogen cars will be exempt from tax.
  • For cars with list price of more than £40,000 there will be a 5 year supplement of £310 per year.

For low emission petrol and diesel cars the increases are certainly significant:

For a new Citroen Airscape 1.2 Vti Flair, 5 door with CO2 Emissions at 99 (g/km) road tax goes from £0 in year 1 and £0 in subsequent years to £120 for the first year and £140 in subsequent years.
A new Nissan Qashqai dCi Visia 5d with CO2 emmisions at 115 (g/km) the first year will go from £0 to £160 and per year from £30 to £140 making a 633.3% increase over 3 years.

 

At the upper end of the emissions scale, the increases are less dramatic:

For a new Audi R8 Coupe 5.2 FSI V10 Quattro 2d S Tronic with CO2 Emissions over 255 (g/km) road tax goes from £1120 in the first year and £515 for subsequent years to £2000 in the first year and £450 (standard rate of £140 plus £310 (additional rate for 5 years) for vehicles that cost more than £40,000). That's an increase of 35% over 3 years.

 

So, if you're planning to sell your car and buy a new one before the road tax changes you'll need to tell the DVLA that you no longer own the car and you'll get a refund for any full months of remaining tax. For your new car use reference number from the green ‘new keeper's details' slip (V5C/2) from the log book.

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