In the biggest tax shake up since the old-fashioned tax disc was abolished in 2014, rates are now set to change from the 1st of April 2017 and this will affect any vehicle first registered from that date.
Fortunately for many of us, the overhaul does not affect cars that have been registered beforehand as tax will carry on being worked out using the original ‘emissions only’ method.
Whilst car tax has previously been based on CO2 emissions alone, the list price will now play a big part – what you pay for tax depends on the vehicle’s final list price and the CO2 band it falls into as of April.
‘up to nine times the current rate’
If you are planning to buy a new car after the changeover day, keep in mind that the new rules may mean you pay up to nine times the current rate – especially on small, economical models – so its worth checking things out beforehand so you can budget more effectively.
Despite the changes, going forward you can still choose to pay road tax monthly, 6 monthly or yearly and by Direct Debit, meaning you do not have to worry about missing a payment ever again.
In brief, for the first year you pay tax based on the CO2 emissions, then payment is determined by the vehicle type; petrol/diesel is £140 a year, hybrids/bioethanol/LPG is £130, whilst vehicles with zero CO2 emissions pay nothing and for new vehicles with a list price of £40,000+ tax is based on CO2 for the first year.
There is also a £310 rate for the five years following the first year on top of the rate associated with the vehicle’s type and after this, tax will be £140, £130, or £0, depending on vehicle type.
To sum up, many new car owners after April 1st may find themselves paying double in tax charges for the year whilst some drivers of alternatively fuelled cars are given a slight discount on their rates, but if you’re car is already registered to you before the ‘big day’ then there is no need to worry!