Revised car tax rates have come into force, meaning that drivers of new diesel vehicles will now face higher first-year tax bands.
From 1 April 2018 the first-year VED tax rate for new diesel cars went up by one band. In addition, the company car tax levied on diesel cars will increase from 3% to 4%.
The new rules only apply to cars, not vans or commercial vehicles, and the extra cost is only payable for models that don’t meet the latest Euro 6 emissions standards when tested on the RDE new real-world emissions regime. At present no new diesels conform to the RDE standards, so the extra fee will apply to all new diesels sold. The increase only applies to first-year VED rates; the subsequent set annual rate of £140 will not be changed.
Car tax costs still make it financially rewarding to buy many pure electric cars. If you’re looking for something like a Nissan Leaf, BMW i3 or Renault Zoe, then you’ll pay no car tax.
If you’re thinking of a premium electric car such as a Tesla Model S, however, it will cost you much more to own because of the new £310 Premium supplement.
Low-emission combustion-engined models and hybrids have become far more costly to tax too. For example, a Nissan Qashqai 1.5 dCi N-Connecta, which emits just 99g/km of CO2, used to qualify for free car tax, but now it costs £140 a year.
Vehicles that produce higher emissions and more eco-friendly models with a list price of more than £40,000 are even more severely penalised. The cost of taxing a Range Rover Sport 3.0 SDV6 has doubled from £815 to £1700. This is because its relatively high emissions mean you have to pay more car tax in the first year, and then the £310 Premium fee on top of the £140 standard rate for the following five years.
These diesel changes follow on from an adjustment of thresholds for all vehicles in April 2017, which ensured that only zero-emissions cars were exempt, and made diesel and petrol cars more expensive.
The change doesn’t apply to any diesel vehicles that are already on the road or already meet RDE2 requirements – they’ll remain in their current tax band. .
Because cars that fail to meet the new standards will be pushed up a tax band, the exact increase in cost will depend very much on how polluting the car in question was in the first place. A small supermini can expect to increase no more than £15, but large-engined cars could see first-year rates rise by over £500.
The table below shows the current bands, with corresponding CO2 emissions figures and the amount payable on initial registration (first year rate) and subsequently (standard rate). Cars costing more than £40,000 to buy are subject to additional taxation.
|CO2 emissions (g/km)||First-year VED rates for petrol and diesel cars registered before 1 April 2018||First-year VED for new petrol cars registered after 1 April 2018||First-year VED for new diesel cars registered after 1 April 2018|
|1 – 50||£10||£10||£25|
|51 – 75||£25||£25||£105|
|76 – 90||£100||£105||£125|
|91 – 100||£120||£125||£145|
|101 – 110||£140||£145||£165|
|111 – 130||£160||£165||£205|
|131 – 150||£200||£205||£515|
|151 – 170||£500||£515||£830|
|171 – 190||£800||£830||£1,240|
|191 – 225||£1,200||£1240||£1,760|
|226 – 255||£1,700||£1760||£2,070|