New rules are set to come into force to increase car tax for new cars, in some cases, up to £2,000 in the first year. The Government rules come into effect for new 2017-plate cars registered from April 1 2017 and are a big shake-up of the current system.
The exact rate is based on CO2 emissions levels and there are 13 bandings; the £2,000 rate is applicable for vehicles over 255g/km, whereas emissions of 180g/km will pay £800 and 120g/km will pay £160. This is a huge increase; currently, vehicles over 255g/km pay £515, so going up to £2,000 will really hit new car owners.
In the second year of ownership, a tax increase also applies but this time a flat rate; with a £140 rate for petrol and diesel vehicles, £130 for hybrids and £0 per year for zero-emission, fully electric vehicles. The hits keep coming; for vehicles with a list price of over £40,000, they will also have to pay an additional £310 on top of the standard rate for five years.
Strangely though, the new rules hit buyers of small, more economical cars the most as currently these are tax-exempt, whereas, in the new system, only vehicles with zero emissions will incur the much-desired £0 per year tax rate.
There appears to be a lack of knowledge about the new rules among UK motorists; only 1 in 10 people understand the rules and the implications that they will have; which considering how much they could set people back, will surely cause concern.
With mere weeks until these new rules come into effect, the understanding needs to increase, particularly as the rules could potentially put someone off buying a new car with a 2017 number plate.
Of course, the solution to avoiding these charges, if you are intent on purchasing a new vehicle, is to go electric. With rising petrol prices and threats of a diesel scrappage scheme, it could well be that the new car tax rules are yet another incentive for motorists to adopt zero-emission vehicles and we may see an increase in electric cars on our roads.
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