Changes to car taxation regulations
As of April 2010 the government has introduced a series of changes to the car taxation system. The revisions affect both the amount we’ll pay to tax our vehicles - and how we can do it.
Car tax payment bands
If your car was registered on, or after the 1st March 2001, it will fall into one of 13 new car taxation or Vehicle Excise Duty (VED) bands. Your vehicle is allocated its band based on its fuel type and CO2 emissions - with owners of greener cars being rewarded with low tax bands A-D (see table below).
Free first year on greener new cars
In addition to making changes to the system of classification, the government has also introduced a ‘free first year’ policy on more eco-friendly vehicles. This applies to any new vehicle purchased in 2010/2011 which falls into band A-D, and exempts owners of the greenest new cars from paying any car tax in the first year.
Steep increases on less efficient vehicles
While the new regulations let drivers of green vehicles off scot free, at the other end of the spectrum purchasers of larger or less fuel efficient cars stand to be heavily penalised - particularly in the first year of ownership.
Whereas vehicles falling into bands A–D go tax free in the first year, cars which fall into bands H-M will now attract an additional fee of anything between £70 and £515 on top of their usual rate of tax (see table below).
Withdrawal of six month tax discs for new vehicles
Under the new legislation, it will also no longer be possible to tax a new car from band A-D or H-M for six months. This rule will only apply when drivers tax their new vehicles for the first time.
|
VED
band
|
CO2
Emissions
(g/km)
|
2008/91
standard
rate
|
CO2
Emissions
(g/km)
|
2009/10
standard
rate4
|
2010/11
first year
rate5
|
2010/11
standard
rate
|
|
A
|
Up to 100
|
0
|
Up to 100
|
0
|
0
|
0
|
|
B
|
101 - 120
|
£35
|
101 - 110
|
£35
|
0
|
£20
|
|
C
|
121 - 150
|
£120
|
111 - 120
|
£35
|
0
|
£30
|
|
D
|
151 - 165
|
£145
|
121 - 130
|
£120
|
0
|
£90
|
|
E
|
166 - 185
|
£170
|
131 - 140
|
£120
|
£110
|
£110
|
|
F
|
over 1862
|
£210
|
141 - 150
|
£125
|
£125
|
£125
|
|
G
|
over 2253
|
£400
|
151 - 165
|
£150
|
£155
|
£155
|
|
H
|
|
|
166 - 175
|
£175
|
£250
|
£180
|
|
I
|
|
|
176 - 185
|
£175
|
£300
|
£200
|
|
J
|
|
|
186 - 200
|
£215
|
£425
|
£235
|
|
K6
|
|
|
201 - 225
|
£215
|
£550
|
£245
|
|
L
|
|
|
226 - 255
|
£405
|
£750
|
£425
|
|
M
|
|
|
over 255
|
£405
|
£950
|
£435
|
12008/09 rates took effect from 13 March 2008
2Includes cars emitting over 225g/km and first registered between 1 March 2001 and 23 March 2006.
3Cars registered on or after 23 March 2006
4Alternative fuel car discounts: 2009/10 £20 bands A - I, £15 bands J - M; 2010/11 £10 all cars
5First year rate or 'showroom tax' applies to new car purchases only. Rate reverts to 'standard rate' in subsequent years. (see also 'important changes' box above)
6Includes cars emitting over 225g/km and first registered between 1 March 2001 and 23 March 2006.