MOTORISTS may find themselves digging deeper into their pockets for their beloved cars after this year’s tax changes.
The rates have been designed to account for the new range of cars which produce lower emissions.
What are the car tax changes in 2018?
Seven out of 10 motorists who are buying a new car face forking out more thanks to the revised Vehicle Excise Duty (VED) tax bands.
The new Vehicle Excise Duty (VED) system was slowly introduced from April 1 2017.
Some drivers will pay nothing towards the changed vehicle excise duty, while others could face a £2,000 fee.
Diesel drivers will be hardest hit by the changes but even motorists who have gone out of their way to purchase an “environmentally friendly” hybrid car will also face steep charges.
From April 1 2018, all new diesel cars will face going up a VED band if they do not meet Euro 6 standards.
The new rules will not apply to vans or commercial vehicles.
The charge for the first year, dubbed the showroom tax, will still be based on CO2 emissions.
But after the second year, diesel and petrol vehicles, diesel vans not included, will incur a £140 tax.
Alternative fuel vehicles including hybrids, bio-ethanol and LPG, will incur a £130 charge.
Cars which cost more than £40,000 will have to pay an additional rate of £130 a year for the first five years, including pure electric cars.
Will the new rules cost you more?
If your car was registered before April 1, then you won’t be affected, but under the new rules all other cars will pay a flat rate of £140.
If your car emits 99g/km and was bought before April 1, it will qualify to be free of road tax for life, and electric and hydrogen cars are also exempt.
But it was bought after the date will cost £120 in the first year, and £140 a year for following years.
Other changes include:
- If your car has an emission of 131g/km, you will be taxed £200 instead of £130 in the first year
- If it emits 151g/km you will be charged £500 instead of £180 in the first year
- If it emits 171g/km you will be charged £800 instead of £295 in the first year
- If it emits 191g/km will be charged £1,200 instead of £490 in the first year
The maximum charge will apply to those emitting over 255g/km, with this figure rising from £1,100 to £2,000.
The new tax system will see many motorists forking out more than before
How are Vehicle Excise Duty bands changing?
The new first year rates are likely to be higher than current prices for many drivers.
But those with heavily polluting cars may actually end up saving money over time compared to the old system.
This is because emission-dependent first year rates will give way to the same flat £140 standard rate, which is likely to be an increase for most low-emission cars on the road today.
Whilst low-emission cars are currently tax free, all non-electric or hydrogen cars will have to pay car tax under the new rules.
The following table explains the changes:
Why are vehicle excise duty rates changing?
The changes are being brought about thanks to the average new UK car owner not paying any tax due to reduced CO2 emissions.
The current CO2 emission bands were introduced in 2001, back when the average UK new car emissions was 178 gCO2/km.
Since this time, in accordance with EU emissions targets, the average new car emissions have fallen to 125 gCO2/km.
Now a vast number of ordinary cars pay no tax at all if they fall in the lower bands of the table.
When do the new emissions tests start?
The new strict emissions tests were rolled out in September 2017 for new car models.
The vehicles will be subjected to on-road tests for the first time in the world, and laboratory tests.
The new lab test, the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) is longer and faster, aiming to better represent modern day driving situations.
The WLTP replaces the New European Driving Cycle.