Road Tax Changes
From April 1st, road tax has dramatically changed. Didn’t know? You weren’t the only one!
A recent survey by website Carbuyer revealed that nine out of ten drivers were unaware of the current change to the price of road tax being changed. This has been seen before when a lack of communication when the tax disk was abolished. Anyway, here is everything you will need to know about the current change.
Cars which were previously exempt, like those using hybrid, are no longer exempt and will have to pay £130 a year road tax. Previously, cars that were emitting 100g of Carbon Dioxide or lower were exempt from paying car tax but since April 1st, they also will be liable to pay £130 every year. However, this isn’t all bad as if you drive a hybrid or your car emits 100g of Carbon Dioxide or lower, you get a discounted price to the standard rate of £140. Only regular petrol and diesel cars owners will have to pay the standard rate.
Nevertheless, if you are paying for a car which is over £40,000 then you will have to pay £310 a year but this will be on top of the standard rate for the first 5 years since buying the car. If you sell the car before the first 5 years are up, the new buyer will have to pay the rest of the money. Yet an advantage of this would be that consumers selling cars over the price of £40,000 might lower the price of the cars to make it more appealing to the costumer.
If you bought a car that emits more than 255g pkm of CO2, your first year fee would be £2000. This is a dramatic increase of £800 from the previous highest first year tax payment.
Car Leasing Contracts
There is some good news about this change. This is because, for many car leasing contracts, road tax will be covered. Whether it’s for 1 year or the entire duration of the contract, you will be covered. Means that it’s always best to check the exact terms of any leasing contract. This is just to be sure where you stand with road tax. Such contracts are usually negotiable so speak with the suppliers with the view to get the best possible deal.
According to the DVLA, approximately £5.6 billion worth of road tax is paid into the general treasury fund on a annual basis.
Before April 1st, if a 3 litre diesel X5 that emits between 201g and 225g of CO2 pkm, between March 2001 and March 2017, the first year would cost you £650 after that, you will be paying £295 car tax per year. Yes you might find this is high but now its a lot higher! The first years rate would be £1200 and £450 after for the next 4 years. Once the car has passed it’s 5 years, the annual tax would be £140. So, before April 1st the total cost for your first 5 years would be £1830 but now it would cost you £3310.
If you have any questions or would like some more information, contact us here.