Following on from the budget of July 2016, new road tax laws are set to come into force on the 1st April. How will this affect your new BMW purchase?
With the dawn of a new year comes inevitable change within the car world, and there are few changes as controversial as this April’s new road tax system. From the first of the month, Vehicle Excise Duty, known as VED or road tax, will be operated under a new banding system that strives to strike a balance between the sharp increase in hybrid vehicles and associated low-emission technologies, and the effect it has had on the treasury.
Advancements made in hybrid vehicle technology have leapt past the taxation laws; many vehicles regarded as ‘regular’ with hybrid capabilities are included in the coveted tax-free bracket. Although these innovations are a positive step, the review in taxation was inevitable with so many cars flying under the taxable radar.
From 1 April 2017, every newly registered car will be taxed in accordance to a drastically overhauled set of CO2 bands for its first year on the road; only fully electric or hydrogen fuel-cell cars with zero emissions will be liable for the lowest, tax-free band.
From the second year, zero-emission cars under a value of £40,000 will continue to be tax-free, and cars of any other band taxed a minimum of £140 a year. If your vehicle has a value above £40,000 it will be taxed an extra ‘Premium’ fee of £310 a year, regardless of its CO2 band, up until its fifth year on the road.
Unsure how this will effect you? Check the table below.
|CO2 Emissions (g/km)||First year rate||Standard rate for cars costing less than £40,000 (year two onwards, payable for 5 years)||Standard rate for cars costing more than £40,000 (year two onwards, payable for 5 years)|
|More than 255||£2,000||£140||£450|