Budget 2017- Diesel car tax could cost you £500 more in 2018, here's why
BUDGET 2017 has been announced revealed an increase to car tax for diesel drivers in the UK. Diesel drivers will pay an inflated rate of vehicle excise duty in the first year. Here’s how much it will cost drivers from April 2018.
Philip Hammond outlines new diesel tax plans
Diesel drivers have been slapped with inflated vehicle excise duty fees in a bid to reduce dangerous levels of air pollution in the UK.
Older and more polluting diesel cars will face paying a higher rate of car tax in a bid to reduce their usage, and encourage motorists to switch to a low emissions model.
Chancellor Philip Hammond made the announcement today as part of the Autumn Budget.
Upcoming newer models that meet current emissions standards will, however, be exempt from the higher charge.
The Chancellor announced: “We published our Air Quality plan earlier this year and we said then that we would fund it through taxes on new diesel cars.
“From April 2018 the first year VED rate for diesel cars that don’t meet the latest standards will go up by one band and the existing diesel supplement in Company Car Tax will increase by 1 per cent.
“Drivers buying a new car will be able to avoid this charge as soon as manufacturers bring forward the next-generation cleaner diesels that we all want to see.
Diesel cars that don’t meet the latest standards will go up by one band
“And we only apply the measures to cars. So before the headline writers start limbering up let me be quite clear.
“No white van man (or woman) will be hit by these measures.
“This levy will fund a new £220m Clean Air Fund to provide support the implementation of local air quality plans.”
This mean that British motorists could end up paying £500 more on car tax in the first year if their cars do not meet the current emissions standards.
For example to insure a car which emits 160g/km of CO2 you would pay £200 for the first year, but under the new tax rules you’d pay £500.
Budget 2017 - How much will diesel car tax increase cost?
Here are new car tax bands as of April 2017 compared to the new rates set to be introduced as of April 2018:
1 - 50 g/km CO2
CURRENT RATE:£10
FROM 2018: £25
51 - 75 g/km CO2
CURRENT RATE: £25
FROM 2018: £100
76 - 90 g/km CO2
CURRENT RATE: £100
FROM 2018: £120
91 - 100 g/km CO2
CURRENT RATE: £120
FROM 2018: £140
101 - 110 g/km CO2
CURRENT RATE: £140
FROM 2018: £160
111 - 130 g/km CO2
CURRENT RATE: £160
FROM 2018: £200
131 - 150 g/km CO2
CURRENT RATE: £200
FROM 2018: £500
151 - 170 g/km CO2
CURRENT RATE:£500
FROM 2018: £800
171 - 190 g/km CO2
CURRENT RATE: £800
FROM 2018: £1,200
191 - 225 g/km CO2
CURRENT RATE: £1,200
FROM 2018:£1,700
226 - 255 g/km CO2
CURRENT RATE: £1,700
FROM 2018:£2,000
Over 255 g/km CO2
CURRENT RATE: £2,000
RAC head of external affairs Peter Williams said: “The Chancellor has chosen to be relatively light touch when it comes to taxing new diesel cars.
“Any new diesel car registered from 1st April 2018 will be hit with a higher first year tax rate unless they conform to the latest real world driving standards.
“So current beleaguered owners of diesel cars can breathe a sigh of relief that they will not be punished further by the Treasury – but they will need to keep their eyes on local authorities who may be introducing clean air zones in the near future.
“The side effect of today’s announcement however might be that there is a risk therefore that it might encourage some to stay with their older diesel vehicles.”
“His decision to increase the diesel surcharge on company car tax appears to be more about revenue-raising rather than using tax to encourage drivers to opt for a particular type of vehicle.”
Car finance expert Graham Hill, however, questioned the Chancellor’s motives: "It's hard to see whether the Chancellor's further squeeze on diesel drivers is out of genuine concern for the environment or just a way to increase revenues from already overtaxed motorists.
"The announcement of a first year VED rate hike on new diesel cars from April next year is designed to sidestep headline-grabbing increases on other motor vehicles like vans, but it still adds to the negative narrative that is talking the automotive market down.
"In the run-up to the Budget, new and used car sales of diesels have suffered significantly - which has had a wider effect on the new car market as customers hold off on purchases in the hope that values recover.
"At this rate, we risk talking the car market into serious trouble."