Car tax 2018 EXPLAINED - Here are what the new tax rules will mean for you
IT WAS announced in the Autumn Budget 2017 that car tax would be increasing for certain diesel drivers across the UK in an attempt to reduce air pollution.
Diesel car tax increase was announced in Autumn Budget 2017
New Vehicle Excise Duty (VED) announcements were made last week, as part of the Autumn Budget, and it could cost millions of British driver more money every year.
These changes were targeted solely at diesel cars and will increase the annual cost of car tax for millions of motorists.
Drivers of diesel cars, which do not meet a pre-determined emissions standard, will be required to pay a band higher car tax than they are currently paying.
From April 2018 if diesel drivers’ cars don’t meet Euro 6 emissions standard in the laboratory of real-world driving conditions then it will cost more.
This could result in diesel owners paying up to £500 more a year to tax their vehicle.
April 2017 changes saw car tax increase across the board in the first year for many motorists.
It saw a hike in first year rates and a new standardised second year fee introduced.
The second year standard rates are:
£140 a year for petrol or diesel vehicles
£130 a year for alternative fuel vehicles (hybrids, bioethanol and LPG)
£0 a year for vehicles with zero CO2 emissions
Under the new rules, only electric cars under £40,000 will not have to pay car tax.
Cars with a value of over £40,000 will have to pay an added surcharge on top of the standard rate for five years.
Motorists driving without car tax has increased since the tax disc was abolished
After this period the car tax rate will drop down back to the standard £140 a year fee.
These changes were focused around CO2 emissions.
This is somewhat problematic as while it addressed one issue and tried to reduce CO2 it also ignored the other pollutants produced by motor cars.
Vehicles emit particulates and nitrogen oxides which can be harmful to people’s health and cause a range of respiratory issues.
These are present in higher quantities in diesel vehicles than petrol while CO2 emissions are lower.
Therefore some toxic diesel could’ve escaped paying the revised fees.
Philip Hammond outlines new diesel tax plans
Taxing your car
More people forgetting to tax their vehicle since the tax disc was abolished in 2013/14
One of the issues is that car tax no longer transfers from car to car when a vehicle is sold, requiring the new driver to tax the vehicle immediately.
Drivers who have full months remaining on car tax of the vehicle they are selling will be refunded by the DVLA.
Diesel drivers can skirt this issue while in the process saving a little cash by setting up a monthly direct debit.
This will add a five per cent premium on top of the car tax fee but is cheaper than paying every six months, which will cost drivers 10 per cent more.
Paying annually does mean, however, that drivers will not pay any added fees.
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