The DVLA is set to introduce new car regulations in the coming days, which could result in some drivers paying significantly more road tax than they used to.
The changes include a new standard road tax rate, fresh taxes for electric vehicles (EVs), increased levies for low-emission vehicles and a doubling of first-year rates for high-polluting new cars.
Richard Evans, head of technical services at Webuyanycar, suggested that some individuals could take immediate action to avoid certain tax payments.
"The tax changes indicate that the cost of electric motoring is set to rise. However, EV drivers are currently free from road tax and can avoid any charges for a further year – but time is running out," he said.
"You can re-tax your car at any time, even if your current cover isn't due to expire for months. So, if you re-tax your EV before March 31 you can enjoy another year's tax-free motoring.
"Since EVs are tax exempt (until the end of March) renewing early costs nothing – and saves you £195."
For EV drivers who do end up paying road tax from April 1, Evans had some words of comfort – they would still benefit from favourable rates, reports Devon Live.
"The £10 showroom tax for new EV buyers is small compared to the rates for low and higher-emission models," he said. "Once the changes take effect, owners of EVs first registered before April 2017 will have the cheapest annual road tax rate of all at just £20.
"This makes older EVs an attractive option for budget used car buyers looking to save on running costs. Meanwhile, road tax rates for cars producing over 76g/km of CO2 are set to double.
"So, if you buy a new luxury or performance car in the highest emissions band from April 1, you'll face a £5,490 first-year road tax bill. Therefore, if ownership costs are a concern, it pays to opt for a greener motor."
Full list of tax changes from April 1
New standard road tax rate
The standard annual road tax rate will increase from £190 to £195. This new rate will apply to all cars first registered between April 1, 2017 and March 31, 2025.
New taxes for EVs
Road tax exemption for all EVs will end. Until this change comes into effect, EVs are exempt from all road tax, but must still be registered.
New EVs registered from April 1 will be taxed £10 in the first year (the "showroom tax"). Any EVs registered with a list price exceeding £40,000 will be subject to the "expensive car supplement" – an additional £425 per year between the second and sixth years of ownership.
EVs registered between April 1, 2017 and March 31, 2025 will be required to pay the standard rate road tax, which is set to increase to £195 per year.
However, all EVs registered before March 31, 2017 will benefit from a lower annual rate of £20.
The £10 annual discount on the standard rate road tax for alternative fuel vehicles, including hybrid, bioethanol and liquefied petroleum gas (LPG) cars will be discontinued from April 1. This means affected drivers will have to pay the new standard £195 annual rate.
Electric vans will also be taxed at an annual rate of £355 – the same rate applied to petrol and diesel light goods vehicles.
Tax increases for low-emission vehicles
First-year road tax for low-emission vehicles producing between 1 and 50g/km of CO2 will rise to £110. Until this change comes into effect, hybrid cars in this band, which includes most plug-in hybrids, pay no road tax in the first year, while petrol and diesel cars in the same band paid £10.
First-year road tax for new cars emitting 51-75g/km will rise to £135. The previous rate for cars in this band was £20 for hybrids and £30 for petrol and diesel cars.
Doubling first-year rates for higher-polluting new cars
The first-year rate for cars in all other road tax bands (producing 76g/km or more) will double. This means new cars in the highest band (those producing 255g/km or more) will be subject to a £5,490 tax in the first year.
The top rate will affect 59 new models from 24 car manufacturers, including Bentley's Continental W12, Porsche's 911 Turbo and Land Rover's Defender V8.
How to determine your car's tax band
Understanding the UK's car tax band system can help you figure out how much road tax you'll need to pay. Here's a guide to how it works.
New cars
If you're purchasing a new car, the first-year showroom tax will be based on the vehicle's CO2 emissions.
Cars registered from April 1, 2017
From the second year of ownership, you'll pay a standard annual road tax, which will rise to £195.
Diesel vehicles registered from April 1, 2025
Any diesel car that fails to meet Real Driving Emissions Step 2 (RDE2) standards will be moved up one showroom tax band.
Cars registered between March 1, 2001 and March 31, 2017 are taxed using 13 emissions-based bands (A to M).
Expensive car supplement
Vehicles with a list price of more than £40,000, including EVs, will be subject to an annual supplement of £425 (for years 2-6), up from the 2024-25 rate of £410. This will apply only to new EVs registered from April 1, 2025. Older EV models are not affected.
Cars registered before March 1, 2001
These are taxed based on engine size rather than emissions.
Payment can be made by either debit card, credit card or Direct Debit. Showroom tax must be paid upfront, but other types of road tax can be paid in instalments. If you opt to pay in twice annual or monthly instalments, a 5% surcharge will be added.
To determine which set of tax bands applies to your car, refer to the date of registration in your V5C logbook.
If your car was first registered from March 1, 2001, click here to use Webuyanycar's CO2 emissions check tool to find its emissions level. From here, you can calculate how much car tax you'll have to pay.
Car tax exemptions
From April 1, road tax exemption for EVs will end. However, there are still some circumstances in which drivers are exempt from car tax.
Drivers with disabilities
You can apply for exemption from vehicle tax if you are in receipt of:
- The higher rate mobility component of Disability Living Allowance
- The higher rate mobility component of Child Disability Payment
- The enhanced rate mobility component of Personal Independence Payment (PIP)
- The enhanced rate mobility component of Adult Disability Payment (ADP)
- Armed Forces Independence Payment
- War Pensioners' Mobility Supplement
You can also apply for a 50% vehicle tax reduction if you receive the standard rate mobility component of PIP or the enhanced rate mobility component of ADP. For more information, click here to visit Gov.uk's 'Financial help if you're disabled' section.
Historic cars
Cars more than 40 years old generally qualify for car tax exemption. But this is not an automatic process. You must apply once your car meets the eligibility criteria. For a more comprehensive explanation, read Webuyanycar's guide by clicking here.
SORN cars
If you declare a SORN (Statutory Off-Road Notification) for your vehicle, you will be exempt from paying road tax for that vehicle.
Furthermore, if you have any full months' car tax remaining, you will be eligible for a car tax refund from the DVLA.
