Proposed Government Car Tax Changes Are Going To Affect Millions Of British Drivers - Although Not Final, We Should Expect Changes To Slowly Start Taking Place As Legislation Changes In Favour Of Greener Cars - To Lets Take A Closer Look

Car Tax Changes

The Government has changed the rates of car tax from 2008-9, it is meant to be an incentive for people to change to smaller engines, to further reduce our carbon emissions & become more environmentally friendly. In theory this is good practice, however, it remains very controversial as in practice, it may prove not to be as easy as it first sounds, especially if for some families, they are already feeling the pinch.

So what will it mean? From March 13 2008, prices for cars falling in the current tax bands C to F will increase by £5 for a 12 month tax disc. Bands A and B remain the same at zero and £35 respectively, while band G tax will see their bill increase to £400. Wow! However, next year-2009, the 7 bands will increase to 13, A-M. Cars which emit less than 100g/km of CO2, such as the Volkswagen Polo Bluemotion and Seat Ibiza Ecomotive will remain tax exempt. Then in April 2010, many new car buyers will have to pay a “first year rate” tax or “showroom tax”, meaning, that buyers of cars which fall into revised tax bands A, B, C and D will pay nothing in the first year, with bands B to D attracting a £20 to £95 rate thereafter. Buyers of cars falling into revised tax bands E to G will pay £115 to £155 from purchase, band H and above will pay a premium rate of car tax, ranging from £250 to £950 in the first year, with future years payments dropping to between £180 to £455.This has led to the label of ‘gas-guzzler’ tax. All in all it is to encourage us to choose greener cars.

Cars Registered After 1 March 2001

However, if your car was registered on or after 1 March 2001, there's a series of Car road tax bands based on its fuel type and CO2 emission levels, if you are able to change to an alternative fuel, such as LPG, which has a lower emissions rating, you'll pay less tax. However all of the information on these bands is not yet available. It is likely that the rate of VED for an engine capacity of 1,549cc or less, the price will be £120 (up £5 from the 2007/8 rate of £115) compared to £185 (up £5 from the 2007/8 rate of £180) per year if the engine's over 1,549cc. Then next year, the upper rate increases to £200 but the smaller-engine rate is fixed-hopefully. This is where it could be difficult for some, or most. It appears that the Government is indirectly & unmeaningly penalising households on lower budgets.

Official CO2 Emissions

How do they decide on the levels of CO2? These official CO2 emissions levels are measured when the model is tested for 'type approval' before it goes on sale and it is this official figure only that's used to determine road tax rates.
The official CO2 emissions figure can be found on the V5 registration document.

Web sites comparing vehicle specifications can be a useful guide when you're thinking about changing your car but CO2 emissions change with model year, trim levels and transmission so you should always check with the dealer or refer to the V5 for the vehicle you're buying if the level of CO2 emissions is important to you.

Car Tax Bands

Car road tax bands and 12 months road tax rate for cars first registered on or after 1 March 2001(As announced in the March 2008 Budget)

Car road tax bands and 12 months road tax rate for cars first registered on or after 1 March 2001
(As announced in the March 2008 Budget)

Table from:
http://www.theaa.com/motoring_advice/car-buyers-guide/cbg_roadtax.html

The typical cars found in these bands are:

A - VW Polo Bluemotion 1.4 Tdi
B - Skoda Fabia Estate Greenline
C - Mazda 2 1.4
D - Kia Picanto 1.1
E - Renault Clio 1.2 Quickshift
F - Vauxhall Astra 1.4 16V
G - Audi A3 2.0 Tdi
H - Citroen C5 2.2 Hdi Est
I - Ford Mondeo 1.6 Estate
J - Saab 9-3 Estate
K - Peugeot 407 saloon 2.0 Auto
L - Peugeot 807 2.0 Auto
M - Land Rover Sport Auto 3.6 TDV8

Table from:
http://www.theaa.com/motoring_advice/car-buyers-guide/cbg_roadtax.html

The Chancellor has also announced a tax cut for drivers of alternative-fuel cars in 2009, which range from £15 to £20, however from 2010 this discount will be a £10 flat rate.

More controversially, although today’s £400 top rate only applies to cars registered after 2006, from March 2009, the rates will even out. If you drive a model registered after 1 March 2001, and it emits more than 255g/km, your tax bill rises from £210 to £440 a year.The Treasury has also mentioned, but not officially confirmed that cars emitting over 226g CO2/km but bought before Budget 2006 will move into Band K in 2009/10 - and will continue to benefit from a reduced rate, and only in 2010/11 will these cars be placed into the band that corresponds to the car's actual CO2 emissions.
If you need to check your current & foreseeable rating, go to links such as:

Vehicle Certification Agency calculators
http://www.eta.co.uk/node/10398

Sources:
www.theaa.com; www.whatcar.co.uk; www.eta.co.uk; www.autotrader.co.uk; www.direct.gov.uk; www.thisismoney.co.uk

Bookmark this page

Copyright © 2008 Click4Warranty
The opinions expressed are those of the author and are not necessarily held by the Click4Group unless specifically stated. The material is for general information only. This article has made reference to many sources and we would like to point out that we have attempeted to note as many of the as reasonabley possible. Always obtain independent, professional advice for your own particular situation.