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Posted:22 March 2018 | Category: General

What do VED changes mean for you?

What do the VED Changes mean for you?

The Government has announced a revamp to the current car tax (VED) system, and as with all things tax; there will be some winners, and some losers. Here at Sinclair Audi, we’re on hand to deliver the news, just don’t shoot the messenger!

You would be right to think ‘Didn’t they change these just last year?’ In short, they did, however, they were just the start to the ongoing legislation adaptations that the Government is looking to enforce to ensure they don’t suffer a shortfall in VED received due to manufacturers cutting emissions.

How much will taxing my car cost?

The new system will be based around C02 emissions for the first year. This will range from £0 for zero emission vehicles and up to a staggering £2,000 for over 255g/km of CO2. In addition if the car you have bought costs over £40,000 you will pay a further supplement for the first five years of ownership. Once your first year of car tax is out the way, you will then pay £140 if you’re a petrol or diesel vehicle driver, or £130 if your vehicle is powered by alternative fuel such as hybrids, bioethanol and LPG. This is relevant, as new car buyers from 2017 will now be faced by this £140 annual fee.

What’s new for 2018?

As for the rule changes that are set to be introduced on April 1st, the biggest losers will be those purchasing a new diesel car that don’t comply with the latest Euro 6 emissions legislation. It has been estimated that this will affect more than 2 million car buyers, and most frustratingly will apply to some cleaner diesel engines, whilst older, dirtier models will be cheaper to tax.

CO2 emissions (g/km)

Current first year VED rate

First year VED rate for diesels not meeting Euro 6 Regulations

0

£0

N/A

1-50

£10

£25

51-75

£25

£100

76-90

£100

£120

91-100

£120

£140

101-110

£140

£160

111-130

£160

£200

131-150

£200

£500

151-170

£500

£800

171-190

£800

£1,200

191-225

£1,200

£1,700

226-255

£1,700

£2,000

Over 255

£2,000

TBC

The new regulations are set to be introduced to penalise those buying cars with high levels of pollution, but it’s worth bearing in mind that the tax will only apply to the initial cost of the car as past the first 12 months, they will face the same tax fees as other cleaner rivals, so £140 or £450 if your car cost more than £40,000. Interestingly, all the new legislation is only applicable to cars, with diesel vans exempt from the extra charge.

So, whilst the first year tax costs may seem daunting across less environmentally-friendly diesels, in the long-run the regulation changes shouldn’t have too much of an impact on drivers’ pockets.