New Road Tax Hits Pockets of eco-conscious

Rear exhaust

Set to be introduced from next April 1st, writes motoring journalist, Iain Robertson, a new Vehicle Excise Duty (VED) regime will see operators of low-polluting cars bearing the brunt of the revised fees.

For the past few years, motorists buying into low-emissions vehicles have either avoided paying VED altogether (sub-100g/km CO2), or have incurred second year charges from £20 (101g/km) to £555 (over 255g/km) annually. The ‘showroom tax’ applied to new cars in their first year ranges from £130 (from 131g/km) to £1,100 (over 255g/km). Users of larger, more polluting vehicles are familiar with paying more.

While the government continues to exercise its austerity measures, digging more deeply into the future intentions of The Exchequer reveals that the annual running costs for some mainstream motorists are about to escalate steeply. Although buyers of more polluting vehicles will ironically save money.

The new rates, applicable on all new cars registered from 1st April 2017 are as follows:


CO2 emissions (g/km) 1st Year Rate (£): Standard rate (Year 2 onwards £): Standard rate (Yr 2 on £40k for 5 years):
0 0 0 310
1-50 10 140 450
51-75 25 140 250
76-90 100 140 450
91-100 120 140 450
101-110 140 140 450
110-130 160 140 450
131-150 200 140 450
151-170 500 140 450
171-190 800 140 450
191-225 1,200 140 450
226-255 1,700 140 450
More than 255 2,000 140 450

The existing description of Vehicle Excise Duty will revert to the former ‘Road Tax’, as the funds raised will create a fund, from which the nation’s broken roads can be repaired.

The following examples will highlight the difference in charges between today’s rates and the fees for the new system.

Example 1: Nissan Leaf Electric Vehicle

Costs less than £40,000

Emits zero CO2
FREE to tax today and from April 2017

Example 2: Tesla Model S Electric Vehicle

Costs more than £40,000

Emits zero CO2
FREE to tax today but, from April 2017, it will cost £0 in year one and £310
per annum thereafter (extra cost over three years = £620)

Example 3: VW Golf 2.0TDi (150ps)

Costs less than £40,000

Emits 109g/km CO2
FREE first tax year tax, then £20 pa; will cost £140 in year one and £140 annually
thereafter from April 2017 (extra cost over three years = £380)

Example 4: Audi A6 allroad 3.0TDi (2690s)

Costs more than £40,000

Emits 149g/km CO2
Costs £145 pa to tax; will cost £200 in year one and £450 annually thereafter,
from April 2017 (extra cost over three years = £665)

It is believed that, of the estimated £5.15bn additional taxation revenue generated, by 2023, £4.69bn will be from the buyers of cars emitting 1-130g/km of CO2. Those vehicle users would not have paid VED for the first year, under the present system.

While the tax system applied on current models (pre-1st April 2017) will remain the same, it is important to ensure that your car’s engine is running at its most efficient status. Regular maintenance carried out at a Mr Clutch Autocentre will help you to budget properly for its annual overheads. In addition, attending to the MoT Test, where applicable on vehicles aged three years or older, will ensure that it remains roadworthy. Naturally, your local Mr Clutch will help wherever it can to keep your motoring costs within affordable limits.

Whether you are contemplating the purchase of a new car from next year, or just hanging onto your existing model, your decision might be affected by future road tax implications.