Flat Rate Car Tax

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By Ben Scott
Marketing Manager

The first thing to note is that the change in Road Tax only affects brand new vehicles bought on or after April 1st 2017. If you already own a vehicle, your Road Tax will not be affected unless you purchase a new vehicle registered after this date.

The VED reform (announced way back in 2015) intends to introduce a flat Standard Rate of £140 road tax to all cars, except for those with zero-emissions which are exempt.

If you are fortunate enough to afford a brand new car valued at over £40,000, then you will be deemed financially stable enough to fork out £450 per year for the first five years of ownership on road tax. After the first five years, the £450 would reduce to £140 in line with all other cars. The added irony to this situation is the £310 additional fee for any vehicle over £40,000 is still payable if the vehicle has zero emissions.

Criticism is already mounting against the change, with accusations that the Government have made a U-turn on their policies in order to make a quick buck. Projected figures suggest the Government stands to make £1.4 billion over the next four years at the expense of motorists who were encouraged to invest in environmentally friendly, low emission vehicles.

Climate change and Global Warming are buzzwords at present with continued outcry about the effect vehicle emissions have on the atmosphere; the decision to flat rate car tax removes the incentive for new buyers to purchase low emission vehicles. A report by Honest John noted that a consumer purchasing a vehicle such as a Mitsubishi Shogun, Subaru Impreza WRX or a Nissan 370Z, all of which have carbon emissions near 250g/km, will pay the same in VED as the owner of a Ford Fiesta 1.0 EcoBoost with CO2 emissions of just 99g/km.

For more information, please see the links below.

Sources:
DVLA: The way car tax is calculated is changing
Daily Mail: Car tax changes from April 1, seven in ten will pay more

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