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Understanding Road Tax

Understanding Road Tax

Although the tax disc is a thing of the past, road tax is still a key element to consider when buying a new car. The cost of tax can differ dramatically on vehicles which may seem quite similar, so it’s important to know what you’ll be paying before making a purchase. This blog will explain how tax is calculated and how much you should be paying.

Why do we pay road tax?

In short, the income raised from road tax is used to make driver’s lives easier. The majority of roadworks are covered for by road tax, the building of new car parks and filling in those awful potholes are also paid for this way.    

How much will I pay?

Every vehicle is put into a band according to its Co2 emissions, with A being the lowest for the least polluting cars. All vehicles registered after 1st April 2017, face a different pricing structure to those registered before this date. This structure was introduced to persuade potential buyers into lower emission vehicles, aiding the government’s tackle on air pollution. You can see the pricing in the tables below.   

Cars registered between 1st March 2001 – 31st March 2017.

 

 

2017/18

2018/19

VED Band

Co2 Emissions (g/km)

Standard Rate

Standard Rate

A

Up to 100

£0

£0

B

101-110

£20

£20

C

111-120

£30

£30

D

121-130

£115

£120

E

131-140

£135

£140

F

141-150

£150

£155

G

151-165

£190

£195

H

166-175

£220

£230

I

176-185

£240

£250

J

186-200

£280

£290

K

201-225

£305

£315

L

226-255

£520

£540

M

Over 255

£535

£555

 

Vehicles registered after 1st April 2017

Co2 Emissions (g/km)

First Year Rate*

Standard Rate

0

£0

£0

1-50

£10

£140

51-75

£25

£140

76-90

£105

£140

91-100

£125

£140

111-130

£165

£140

131-150

£205

£140

151-170

£515

£140

171-190

£830

£140

191-225

£1240

£140

226-255

£1760

£140

Over 255

£2070

£140

 

*the first year rate will be one band higher for diesel vehicles.

Another change that came into force with the 2017 tax revamp was an extra charge for vehicles with a £40,000+ list price. This additional charge must be paid the second time it is taxed and will be applicable for the following 5 years. The costs are as follows;

Fuel Type

Additional Charge

Petrol or Diesel

£450

Electric

£310

Alternative

£440

 

You can check your vehicle’s Co2 emissions and tax cost by visiting this link - https://www.gov.uk/co2-and-vehicle-tax-tools

Do any vehicles have zero road tax?

Vehicles tax rates changed from 1st April 2017. The new rules state that any vehicle registered after this date which emits zero emissions and have a value under £40,000 is road tax exempt. Anything registered between 1st March 2001 and 31st March 2017, benefits from zero tax if they produce 100 g/km Co2 or less.  

Any historic vehicle registered before 1st January 1978 and any car used by a disabled driver are not chargeable.

How do I pay road tax?

As soon as a vehicle is sold and the DVLA are informed, the current road tax is cancelled and the previous owner is refunded the remaining balance. The new owner can arrange tax three ways, by an annual one-off payment, a six-month payment or by monthly direct debits.

Administration Fees

To ensure we can offer all our customers the best value we have tailored our administration fee to our customers individual circumstances. This fee is a compulsory fee and applies to all our cars depending on your below circumstances:

Visit Cargiant's T&Cs for further information