The winners and losers of last year’s road tax changes (and what’s next)

Motoring 2018-3-26
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A one-year-on look at the recent road tax changes.

Last April, the Government made some changes to road tax, in order to make it a fairer deal for greener vehicles, and to simplify the cost structure.

One year on, we take a look at who the winners and losers of these changes really are, and what we can expect for the year ahead.

The winners

Pre-registered car owners
So soon after the changes, a lot of people fall into this category. The changes only apply for newly registered cars, so if you were already the registered owner of yours before 1 April 2017, chances are you won’t have noticed the effect yet. Those who bought a relatively new car just before the deadline are in the best position as they could potentially be facing years of unaffected bliss.

Electric car owners
Those who have bought a brand new electric car are also in a great position – with nothing to pay on road tax after year 1. Of course, the cost of these vehicles usually makes up for that, but it’s a step in the right direction, and every little helps.

The losers

High Co2 emission car owners
Those who own cars with the highest emissions have been the worst hit, as the first year is based entirely on that, and the upper limit is very high (up to £2k). After that, they’re likely paying the max standard fee of £140.

High value car owners
Those with cars worth over £40k get stung by yet another charge of £310 after the first year, up to year 5 when it will be ‘reduced’ back to the usual charge which is based on fuel type.

Petrol and diesel car owners
If you own a standard petrol or diesel car, from year 2 you’ll be paying the highest standard charge of £140. If you go for an alternatively fuelled vehicle, you’ll be paying slightly less at £130. Some diesel owners are also now having to deal with the stigma associated with owning a diesel powered car, meaning those who chose diesel originally based on the incentives put in place by the Government in previous years are finding themselves struggling to sell them on.

More changes ahead…
What’s more, from April 2018 diesel lovers could find themselves in more hot water if their cars don’t meet RDE2 standards - and manufacturers are claiming there's unlikely to be any fully compliant diesels until around 2020. This change could mean diesel owners paying an average of £200 a year more to tax their vehicle.

Hitachi Hints and Tips is intended to be informative and interesting. It does not constitute financial advice, and you should always do further research when making any financial decisions. All information was correct at date of publication.
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