From 1st April 2020 Car tax or Vehicle Excise Duty (VED) rates are increasing for various vehicles.
As you will know, all drivers in the UK are required to pay VED or Road Fund License, often known as road tax or car tax. The amount is based on the fuel type and the amount of CO2 emissions that are generated by your vehicle when it is first registered. As a general rule, the lower the CO2 emission figure of your vehicle, the lower the rate of your VED.
A vehicles CO2 emissions and fuel consumption figures are now found using a new method of testing, known as the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). WLTP replaces the New European Driving Cycle test (NEDC), a method which is now outdated and frequently understated CO2 emissions and overstated fuel efficiency. Using WLTP provides a more realistic assessment, providing more accurate results.
Consequently, the official CO2 emission figures for many vehicles will increase, placing them in a higher tax band to the current existing rate and causing an increase in the cost of your car tax for the first year.
In real world terms, regardless of when a same specification vehicle is registered, there will be no increase in actual CO2 emissions or decrease in fuel consumption. WLTP has been introduced to supply a more realistic figure as to what to expect when driving a car as well as making comparisons between various makes and models easier.
When will the Car Tax increase?
The change in Car Tax prices will be introduced on 1st April 2020 for VED and 6th April 2020 for benefit-in-Kind tax for company car drivers. This will only affect the very first car tax payment when a new vehicle is bought and registered after these dates. After the first year, the ongoing rate will continue to be a flat figure. This is £145 per year, with a £10 discount for alternatively fuelled vehicles (hybrids, mild hybrids and plug-in hybrids). Cars that have a list prices of £40,000 or more (after options) are subject to a further £320 annual supplement until they are six years old.
Fully electric cars (EVs) eg. Audi e-tron are exempt from both first-year and annual car tax, though EVs such as the e-tron which cost £40,000 or more are still subject to the £320 supplement.
Using the table below, you will be able to calculate which tax band your vehicle will be in:
|VED Band||CO2 Emissions (g/km)||First-Year Rate (petrol and RDE2 compliant diesel models)||First-Year Rate for non-RDE2 diesels||Alternative Fuel Vehicles|
|B||1 - 50||£10||£25||£0|
|C||51 - 75||£25||£110||£15|
|D||76 - 90||£110||£130||£100|
|E||91 - 100||£130||£150||£120|
|F||101 - 110||£150||£170||£140|
|G||111 - 130||£170||£210||£160|
|H||131 - 150||£210||£530||£200|
|I||151 - 170||£530||£855||£520|
|J||171 - 190||£855||£1,280||£845|
|K||191 - 225||£1,280||£1,815||£1,270|
|L||226 - 255||£1,815||£2,135||£1,805|
Many new diesel cars sit one band higher for the first year car tax rate. A petrol car that emits 110g/km of CO2 will cost £150 and most equivalent diesels will be £170. This is because many diesel models across all manufacturers don't meet the latest emission standard (RDE2) resulting in an additional charge. This standard is yet to come legally into force and other than the £20 additional cost non RDE2-compliant vehicles will face no further penalty in future.