Changes to Car Tax start in April 2017

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With changes to the car tax system announced in the latest Budget, the cost for vehicles registered after April 1^st 2017 can mean a big change for motorists. The cost of road tax can end up being as high as £450 a year for new car owners – but the biggest change will be seen by those that drive eco-friendly cars. Check out what it means to you below.

Will my road tax change?

The first thing to note is that this only affects buyers of new cars from 1^st April 2017 onwards. Any car registered before this date will pay the rates on the same calculations as they are now.

Why make changes at all?

With cars becoming more efficient and eco-friendly the government coffers have seen a hit from lower car tax paid by a higher proportion of cars. So they have made these changes to raise finance. Lower emissions vehicles pay little or no road tax, so new car buyers will be made to pay to make up this shortfall in car tax revenue.

So what changes will be made?

The calculation will be based on the CO2 or Carbon Dioxide emissions of a car or motor-home if it is registered on or after 1^st April 2017. These are different calculation to the current system and the payments are increasing significantly. Most vehicles will see their tax classified as the standard rate of £140 per year. If the vehicle has zero emissions then there will be no road tax to pay at all.

How much will you pay? Try out our online car tax calculator.

What about other vehicles?

If the car has a list price of over £40,000 at first registration then the road tax is even higher. The rate will be £450 per year every year for the first 5 years of it being on the road. After that the rate drops to the standard fee of £140.

How will it affect me?

It depends on your choice of new car. If you buy something with a high list price then you will be hit with the £450 for 5 years. But those motorists that buy efficient cars that use modern technology to produce low emissions will be hit by a significant rise and will land on the £140 a year rate the same as many other car owners. This is seen as a slap in the face to people that are trying to help the environment by buying low emission cars.

What happens with my current car?

In short, nothing changes. The car you are driving now will continue to be assessed on the old rates. This is also the same if you buy or sell a car that is registered before April 1^st 2017. So second hand cars with a sub-100g/km emission may see their prices rise as they will attract no road tax.