UK motorists are less than a couple of months away from new car tax changes, which could see them pay more vehicle excise duty (VED).
Car tax rules changed in 2017 making CO2 emission targets stricter.
The April 2017 changes saw car tax increase across the board in the first year for many motorists.
It saw a hike in first year rates and a new standardised second year fee introduced.
The second year standard rates are:
£140 a year for petrol or diesel vehicles
£130 a year for alternative fuel vehicles (hybrids, bioethanol and LPG)
£0 a year for vehicles with zero CO2 emissions
Under the new rules, only electric cars under £40,000 will not have to pay car tax.
Cars with a value of over £40,000 will have to pay an added £310 surcharge on top of the standard rate for five years.
After this period the car tax rate will drop down back to the standard £140 a year fee.
These changes were focused around CO2 emissions.
In the Autumn budget 2018 after some complaints the the new rules still don’t come down on diesel drivers hard enough, harsher fees for diesle drivers were announced in an attempt to improve air pollution.
The changes, targeted solely at diesel cars, will increase the annual cost of car tax for millions of motorists.
Drivers of diesel cars, which do not meet a pre-determined emissions standard, will be required to pay a band higher car tax than they are currently paying.
From April 2018 if diesel drivers’ cars don’t meet Euro 6 emissions standard in the laboratory of real-world driving conditions then it will cost more.
This could result in diesel owners paying up to £500 more a year to tax their vehicle.
Here are new car tax bands as of April 2017 compared to the new rates set to be introduced as of April 2018 for diesel drivers:
1 – 50 g/km CO2
FROM 2018: £25
51 – 75 g/km CO2
CURRENT RATE: £25
FROM 2018: £100
76 – 90 g/km CO2
CURRENT RATE: £100
FROM 2018: £120
91 – 100 g/km CO2
CURRENT RATE: £120
FROM 2018: £140
101 – 110 g/km CO2
CURRENT RATE: £140
FROM 2018: £160
111 – 130 g/km CO2
CURRENT RATE: £160
FROM 2018: £200
131 – 150 g/km CO2
CURRENT RATE: £200
FROM 2018: £500
151 – 170 g/km CO2
FROM 2018: £800
171 – 190 g/km CO2
CURRENT RATE: £800
FROM 2018: £1,200
191 – 225 g/km CO2
CURRENT RATE: £1,200
226 – 255 g/km CO2
CURRENT RATE: £1,700
Over 255 g/km CO2
CURRENT RATE: £2,000
These changes only apply to passenger cars and not vans or commercial vehicles.
It has been suggested that no driver will be able to complete skirt the newly inflated fees, as the new emissions standard they will be based on RDE2, which is a new driving emissions standard, has not even been finished.
RDE2 is a more rigorous test than Euro 6 but it isn’t set to become an industry standard until 2020.
Many have therefore called the move unfair as drivers set to be punished for a 2020 regulation from April 2018.
Taxing your car
More people are forgetting to tax their vehicle since the tax disc was abolished in 2013/14
One of the issues is that car tax no longer transfers from car to car when a vehicle is sold, requiring the new driver to tax the vehicle immediately.
Drivers who have full months remaining on car tax of the vehicle they are selling will be refunded by the DVLA.
Diesel drivers can skirt this issue while in the process saving a little cash by setting up a monthly direct debit.
This will add a five per cent premium on top of the car tax fee but is cheaper than paying every six months, which will cost drivers 10 per cent more.
Paying annually does mean, however, that drivers will not pay any added fees.