Not so green……by @parliamentview

Changes to Vehicle Excise Duty for new cars from April 2017 has thrown up some anomalies.

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Only ZERO emissions cars will continue to be free of road tax…..unless they cost over £40,000.

Tesla Model S 60kwh Price £58,335 Emissions 0g/km

2016 – First year VED – £0 – ongoing VED (Standard Rate) £0

2017 – First year VED =- £0 – ongoing VED (Standard Rate) Yrs 2 to 6 incl £310 yr 7 onwards £0

WVVauxhallZafiraTourer.jpg

Some buyers will pay a huge increase in VED in the first year, but pay less from the second year….

Vauxhall Zafira Tourer 1.4T SRi Price £23,095 Emissions 158g/km

2016 – First year VED – £185 – ongoing VED (Standard Rate) £185

2017 – First year VED =- £500 – ongoing VED (Standard Rate) £140

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Likewise cars with identical engines & emissions, but either side of £40,000 also attract different rates, showing that exchequer revenue is now the driving force.

VW Toureg 3.0 V6 TDi Bluemotion 262 Response Price £35,510 Emissions 174g/km 

2016 – First year VED – £300 – ongoing VED (Standard Rate) £210

2017 – First year VED =- £800 – ongoing VED (Standard Rate) £140

VW Toureg 3.0 V6 TDi Bluemotion 262 R Line Plus Price £49,595 Emissions 174g/km

2016 – First year VED – £300 – ongoing VED (Standard Rate) £210

2017 – First year VED =- £800 – ongoing VED (Standard Rate) Yrs 2 to 6 incl £450 yr 7 onwards £140

These changes have been brought about because of the loss of revenue to the government brought about by more cars falling into lower VED brackets……

The current VED structure based on CO2 bands was introduced in 2001 when average UK new car emissions were 178 gCO2/km. The Band A threshold of 100 gCO2/km below which cars pay no VED was introduced in 2003 when average new car emissions were 173 gCO2/km. Since then, to meet EU emissions targets average new car emissions have fallen to 125 gCO2/km. This means that an increasingly large number of ordinary cars now fall into the zero- or lower-rated VED bands, creating a sustainability challenge and weakening the environmental signal in VED. This is set to continue as manufacturers meet further EU targets of 95 gCO2/km set for 2020. Additionally, the system results in significant unfairness as owners of newer cars pay little or no VED while owners of older cars generally pay higher rates.

The reformed VED system retains and strengthens the CO2-based FYRs to incentivise uptake of the very cleanest cars whilst moving to a flat SR in order to make the tax fairer, simpler and sustainable. To ensure those who can afford the most expensive cars make a fair contribution, a supplement of £310 will be applied to the SR of cars with a list price (not including VED) over £40,000, for the first 5 years in which a SR is paid. Source: https://www.gov.uk/government/publications/vehicle-excise-duty/vehicle-excise-duty

Vehicle Price and CO2 data from What Car Dec 2016 and above examples assume the same models will be available new on 1st April 2017.

 

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