A number of changes are potentially due to the cost of taxing your cars
A number of changes are potentially due to the cost of taxing your cars
Drivers could be about to face a significant increase in road tax due to new regulations being introduced by the DVLA. In the coming days, motorists will see a number of changes come into force, including a revised standard road tax rate, new taxes on electric vehicles (EVs), hiked charges for low-emission cars, and a hefty rise in first-year rates for those driving high-polluting new vehicles.
Richard Evans, from vehicle purchasing service Webuyanycar, advised car owners that they might be able to skirt around some of the impending costs.
He said: “The tax changes indicate that the cost of electric motoring is set to rise. However, EV drivers are currently free from road tax and can avoid any charges for a further year – but time is running out.
“You can re-tax your car at any time, even if your current cover isn’t due to expire for months. So, if you re-tax your EV before March 31 you can enjoy another year’s tax-free motoring,” reports Lancs Live.
“Since EVs are tax exempt (until the end of March) renewing early costs nothing – and saves you £195.”
For those electric vehicle enthusiasts who may find themselves liable for road tax from April 1, Evans offers reassurance—although affected, these drivers will still experience better rates than most.
“The £10 showroom tax for new EV buyers is small compared to the rates for low and higher-emission models,” he explained. “Once the changes take effect, owners of EVs first registered before April 2017 will have the cheapest annual road tax rate of all at just £20.”
The appeal of older electric vehicles (EVs) as a cost-effective choice for second-hand car buyers looking to cut down on running expenses is growing. Furthermore, car owners should brace themselves for a hike in road tax rates for vehicles emitting over 76g/km of CO2, with some rates set to double.
Buyers of new luxury or performance vehicles with a high emissions output face a significant increase in costs from April 1, according to an industry expert who said: “So, if you buy a new luxury or performance car in the highest emissions band from April 1, you’ll face a £5,490 first-year road tax bill. Therefore, if ownership costs are a concern, it pays to opt for a greener motor.”
Here’s a breakdown of the tax changes kicking in from April 1:
New standard road tax rate:
– The standard annual road tax will rise from £190 to £195 and will be applicable to cars registered from April 1, 2017 until March 31, 2025.
New taxes for EVs:
– EVs will no longer be exempt from road tax. Until now, EVs had been exempt from road tax, though they still needed to be registered.
– New EVs registered from April 1 onwards will incur a £10 tax in the first year (also known as the “showroom tax”). Plus, any EV listed at over £40,000 will be required to pay an “expensive car supplement”, costing an extra £425 annually between the second and sixth years of vehicle ownership.
– EVs that were registered between April 1, 2017, and March 31, 2025, will now have to pay the standard rate road tax which will be bumped up to £195 each year.
– However, there’s good news for those with EVs registered before March 31, 2017 — they will benefit from a lower yearly rate of just £20.
The £10 annual discount on the standard road tax for alternative fuel vehicles, including hybrid, bioethanol and liquefied petroleum gas (LPG) cars, will be scrapped from April 1. This means that drivers of these vehicles will have to pay the new standard annual rate of £195.
Electric vans will also face an annual tax rate of £355 – the same rate as petrol and diesel light goods vehicles.
Tax hikes for low-emission vehicles:
First-year road tax for low-emission vehicles emitting between 1 and 50g/km of CO2 will increase to £110. Until this change is implemented, hybrid cars in this band, which includes most plug-in hybrids, are exempt from road tax in the first year, while petrol and diesel cars in the same band pay £10.
First-year road tax for new cars emitting 51-75g/km will rise to £135. The previous rate for cars in this band was £20 for hybrids and £30 for petrol and diesel cars.
Doubling first-year rates for higher-polluting new cars:
The first-year rate for cars in all other road tax bands (emitting 76g/km or more) will double. This means new cars in the highest band (those emitting 255g/km or more) will face a hefty £5,490 tax in the first year.
This top rate will impact 59 new models from 24 car manufacturers, including Bentley’s Continental W12, Porsche’s 911 Turbo and Land Rover’s Defender V8.
How to determine your car’s tax band:
Getting to grips with the UK’s car tax band system can be a great help in determining your road tax obligations. Here’s a handy guide to how it all works.
New Cars.
For those buying a new car, the first-year showroom tax will be calculated based on the vehicle’s CO2 emissions.
Cars Registered from April 1, 2017.
From the second year of ownership onwards, you’ll be required to pay a standard annual road tax, which will increase to £195.
Diesel Vehicles Registered from April 1, 2025.
Any diesel vehicle that doesn’t meet the Real Driving Emissions Step 2 (RDE2) standards will be bumped up one showroom tax band.
Cars Registered Between March 1, 2001 and March 31, 2017.
These vehicles are taxed using 13 emissions-based bands, ranging from A to M.
Expensive Car Supplement.
Vehicles with a list price exceeding £40,000, including electric vehicles (EVs), will be subject to an annual supplement of £425 (for years 2-6), a rise from the 2024-25 rate of £410. This will only apply to new EVs registered from April 1, 2025.
Older EV models won’t be affected.
Cars Registered Before March 1, 2001.
These vehicles are taxed based on engine size, not emissions.
Payment can be made via debit card, credit card or Direct Debit. Showroom tax must be paid upfront, but other types of road tax can be paid in instalments.
If you choose to pay in twice yearly or monthly instalments, a 5% surcharge will be added.
To find out which tax bands apply to your car, check the date of registration in your V5C logbook.
If your vehicle was first registered from March 1, 2001, you can use Webuyanycar’s CO2 emissions check tool to determine its emissions level. This will help you calculate the amount of car tax you’ll need to pay.
Car tax exemptions:
From April 1, road tax exemption for electric vehicles (EVs) will cease. However, there are still certain situations where drivers can be exempt from car tax.
Drivers with disabilities.
If you’re a driver with a disability, you may be eligible for an exemption from vehicle tax.
You can also apply for a 50% reduction in vehicle tax if you receive the standard rate mobility component of Personal Independence Payment (PIP) or the enhanced rate mobility component of Armed Forces Independence Payment (AFIP). For more information, visit the ‘Financial help if you’re disabled’ section on Gov.uk.
Historic cars.
Cars that are over 40 years old generally qualify for car tax exemption. However, this is not automatic – you must apply once your car meets the eligibility criteria. For a more detailed explanation, read Webuyanycar’s guide.
SORN cars.
If you declare a Statutory Off-Road Notification (SORN) for your vehicle, you won’t have to pay road tax for it.
Additionally, if you have any full months of car tax left, you could be eligible for a car tax refund from the Driver and Vehicle Licensing Agency (DVLA).
