The way we pay road tax will change from 1 April and it is something you need to consider if you’re looking into buying a new car.
Vitally, it is those buying new cars with low CO2 emissions that face the highest relative rise in road tax. At the moment, many vehicles don’t incur the charges, formally known as Vehicle Exercise Duty (VED).
For cars that are registered on or after 1 April 2017, there will be first year of charges linked to carbon emission, after that there will be three bands – zero, standard and premium, determining how much you will pay each year.
Crucially, if you have a car already, these rule changes do not apply and you will continue to pay VED under the current rates.
The Changes – CamTrak – Commercial Vehicle Camera Systems
These changes were announced in the July 2015 Budget, and they reflect the fact that car manufacturers have cut many car models’ CO2 emissions.
This means their owners benefit from the existing VED bands that tax lower-emissions vehicles more lightly. As more and more cars got cleaner, the existing rules have cut back the Treasury’s income. From the beginning of April, only newly registered cars with zero emission will be exempt from VED.
For anyone who buys a car that costs more than £40,000, there will be a premium of £310 for the first five years of ownership.
Older Vehicles? – CamTrak – Commercial Vehicle Camera Systems
Cars that are registered before 1 April 2017, will not be affected by the changes in VED – so, therefore, existing car owners will pay as they did before.
The charges do not apply to cars that are already on the road, so if you’re buying a second-hand car then the changes in VED will not affect you.