The new rules for road tax come into effect on April 1st 2017 and we're here to help you make sense of it all.
Since the start of the year we've been helping customers come to terms with the new tax rate changes before they come into effect on April 1st 2017. With many folks confused and worried about the forthcoming changes we decided to share our answers to your most commonly asked questions.
So if you're planning on buying a new car this year, read on...
When do the changes start and will my car tax go up?
The changes come into force on April 1st 2017 and will only effect new vehicles registered after that date. For all vehicles registered before April 1st 2017 (and after 1st March 2001) the existing tax rates will still apply. Click here to view the pre April 1st 2017 tax rates
How much will road tax cost after April 1st 2017?
With the exception of zero CO2 emission vehicles all vehicles registered after April 1st 2017 will pay a flat rate of £140 per year plus a one-off tax charge for the first year based on a revised version of the current CO2 tax band system. Click here to view the first year tax rates
Will free annual road tax still be available after April 1st 2017?
Yes, but only for vehicles producing zero CO2 emissions - this means fully electric and hydrogen cars only. For all other vehicles an annual flat rate of £140 applies.
I'm thinking of buying a new car this year, how will the new rules effect me?
Generally speaking the cost of taxing a car after April 1st 2017 will increase. For example a car that is CO2 rated at 100g/km or lower – and thus free of road tax for life under the current VED band system – will cost its owner £400 over three years, £680 over 5 years, or a whopping £1,380 over ten years. If you can buy the same car before the April 1st deadline you'd make significant savings.
There are some exceptions for high CO2 cars costing less than £40,000 but that's not really an option if you're conscientious about running costs.
I'm thinking of buying a used car this year, how will the new rules effect me?
Great news! If you buy a used car after April 1st 2017 the road tax rate will not change from the current figures so whatever you paid last year will be the same this year.
What happens to your road tax when you sell your car?
Under the new car tax system, any remaining road tax will not transfer to the new owner with the vehicle. Instead, the seller can get a road tax refund on any tax remaining on the vehicle, while the buyer has to pay to re-tax the car.
The tax refund on a sold car will be sent automatically when the DVLA receives notification that the car has been sold, scrapped, exported or taken off the road with a Statutory Off Road Notification (SORN).
Are there any other costs that I should be aware of?
Yes. The government are introducing an additional charge for vehicles costing more that £40,000 (the list price before discounts). From April 1st 2017 these vehicles will be subject to an annual tax supplement charge of £310 for the first 5 years.
Hopefully that's makes things a little clearer for you but if you're still not sure please give us a call at John Mulholland Motors Randalstown or Campsie and we'd be happy to answer any other queries you may have.