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Taken from a motor club newsletter
Big Road Tax Increases Coming
New car buyers battered by price increases since the £ started dropping last year are now going to be
hit by significant hikes in road tax from April 1st. In 2001 a new system was introduced basing the
tax on emissions, or perhaps I should say “claimed” emissions? In 2001 the average new car emissions
were 178 grams of CO2 per km, now its 125 grams. In 2003 it was announced that cars emitting
under 100 grams would pay no road tax at all, and this has become a high proportion since then.
The EU target is average emissions of 95 grams by 2020, so Government revenues from Road Tax,
having already fallen sharply, are to fall further still. Eventually the Treasury have decided enough
is enough, so a new system comes into effect on April 1st. The first year rate on a 99 gram car goes
from zero to £120, and then to £140 from the second year on. £140 is the rate from year 2 on all
cars, but those emitting more than 255 grams get a Year 1 rate of £2000 against £1120 currently.
But there’s more! Should your new car have a retail price of over £40000 then a surcharge of £310
will be payable for each of the first 5 years. So effectively a 255 gram car priced at £40000+ will
cost £4110 for 5 years against £3180 currently.
Cars registered by March 31st are unaffected for all of their lives (currently!) so there will be a rush
to buy in March followed by a very quiet April. And cars pre registered in March, particularly expensive
ones, will be much in demand. That of course is if people are aware of these impending
changes – a recent survey showed that only 8% of potential new car buyers are!
The Treasury expect that as a result of these changes they will be pulling in an extra £1 billion a
year by 2020, good to know that all the money raised will be spent on repairing pot holes – if only!!
Big Road Tax Increases Coming
New car buyers battered by price increases since the £ started dropping last year are now going to be
hit by significant hikes in road tax from April 1st. In 2001 a new system was introduced basing the
tax on emissions, or perhaps I should say “claimed” emissions? In 2001 the average new car emissions
were 178 grams of CO2 per km, now its 125 grams. In 2003 it was announced that cars emitting
under 100 grams would pay no road tax at all, and this has become a high proportion since then.
The EU target is average emissions of 95 grams by 2020, so Government revenues from Road Tax,
having already fallen sharply, are to fall further still. Eventually the Treasury have decided enough
is enough, so a new system comes into effect on April 1st. The first year rate on a 99 gram car goes
from zero to £120, and then to £140 from the second year on. £140 is the rate from year 2 on all
cars, but those emitting more than 255 grams get a Year 1 rate of £2000 against £1120 currently.
But there’s more! Should your new car have a retail price of over £40000 then a surcharge of £310
will be payable for each of the first 5 years. So effectively a 255 gram car priced at £40000+ will
cost £4110 for 5 years against £3180 currently.
Cars registered by March 31st are unaffected for all of their lives (currently!) so there will be a rush
to buy in March followed by a very quiet April. And cars pre registered in March, particularly expensive
ones, will be much in demand. That of course is if people are aware of these impending
changes – a recent survey showed that only 8% of potential new car buyers are!
The Treasury expect that as a result of these changes they will be pulling in an extra £1 billion a
year by 2020, good to know that all the money raised will be spent on repairing pot holes – if only!!
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