Firstly, if you are worried about your current car, don’t panic. The changes will only affect cars registered after the 1st of April 2017.
What does this mean if you are buying a new car after the 1st of April then?
Well, just like before, the Vehicle Excise Duty (‘Road Tax’ to you and I); is predominantly priced depending on the vehicles C02 emissions. However, up until now, if you purchased a car which produces less than 99g/km the chances are you didn’t have to pay any road tax.
However, as car manufacturers have managed to produce more and more efficient engines, such as the multi-award winning Ford Ecoboost 1.0 litre Turbo powerplant; the Treasury have realised that they are missing out on several million pounds of Road Tax revenue and have readdressed the road tax system to place a few more pounds in the coffers.
Now, the only vehicles that will have £0 Road Tax are all-electric ‘Zero Emissions’ vehicles… Unless your new cars list price is over £40,000, in which case you will still have to pay £310 premium for the first five years, regardless of the gasses that come out the back.
In real terms, after the “First Year Rate” (included in the on the road price of the vehicle), what this means is that most vehicles will command a £140 per year annual road tax fee, whether you drive a Fiesta, a Kuga or a Focus RS as the table from the DVLA below indicates.
Source: DVLA 2017