Car Tax Costs to Increase for Diesel Drivers

Car Tax Costs to Increase for Diesel Drivers

Car Tax Costs to Increase for Diesel Drivers

At the start of the current tax year in April 2017, new car tax rules came into effect. This set of tax bands for Vehicle Excise Duty only applies to new car buyers. If you bought your car before April 2017, you don’t need to worry about an increase in car tax yet. However, if you have been paying the first year tax rates since buying a new car last year, your car tax is about to change yet again. Keep reading to make sure you are aware of the way these changes to car tax will affect you.

First Year Rates

Vehicle Excise Duty in the first year depends on the car’s CO2 emissions. The tax scale begins from £10 for the lowest emissions bracket, going up to £2000 for the highest amount. Vehicles with zero CO2 emissions don’t have to pay anything in the first year. These are the rates you should have been paying if you bought a car from April 2017 onwards. If you aren’t sure which tax bracket you fit into, you can check CO2 emissions online according to the make and model.

CO2 Emissions (g/km)
Petrol (TC48) and Diesel Cars (TC49)
Alternative Fuel Cars (TC59)
0
£0
£0
1-50
£10
£0
51-75
£25
£15
76-90
£100
£90
91-100
£120
£110
101-110
£140
£130
111-130
£160
£150
131-150
£200
£190
151-170
£500
£490
171-190
£800
£790
191-225
£1200
£1190
226-255
£1700
£1690
Over 255
£2000
£1990

Subsequent Standard Rates

The new tax year is coming up on 6th April 2018, which means the first year rates will no longer apply to many drivers. For some, the reversion to a standard flat rate might save them money. But for quite a few people, the new rate could see a big increase in their car tax. The blanket rate comes into effect from the second time you tax your car. You will have to pay this rate from the second year onwards. The three new tax bands depend on fuel type instead of CO2 emissions.

Fuel Type
Single Standard Payment
Petrol or Diesel
£140
Alternative
£130
Electric
£0

Alternative fuel types include hybrids, bioethanol, and liquid petroleum gas. Electric cars still cost £0 for the fuel tax. However, electric cars are usually expensive. From the second year, having an electric car may not help to reduce tax costs. This is due to the introduction of an additional tax payment for cars with a list price over £40,000. The list price is the price your dealer offers you before any discounts. If it applies to you, then you have to pay this extra car tax for five years.

Fuel Type
Single Standard Payment
Petrol or Diesel
£450
Alternative
£440
Electric
£310

The only way to pay £0 in vehicle excise duty is if you have an electric car with a list price below £40,000. This isn’t impossible since there are several electric cars on the market for less than £30,000. Bear in mind that the final list price includes any extras, which could bring it up. Vans and commercial vehicles are also exempt from any of these tax rates. The changes apply to passenger cars only. Drivers of diesel cars are going to be hit the hardest by new car tax costs.

Why is Car Tax Changing?

From April 2018, buyers of new diesel cars will risk increasing their car tax if the car does not meet Euro 6 standards for exhaust emissions. These tests measure emissions in more accurate real-world conditions. The criteria for measuring emissions is going to change again in 2020 as well. It is likely that there will be more adjustments to the car tax bands to meet these new test standards. This is definitely stressful for motorists, as the cost of driving seems to keep rising. However, encouraging new car buyers to avoid diesel or petrol cars is generally a good thing.

The benefit of this crackdown for diesel cars will be an improvement to the environment. The UK government is working on solutions to reduce toxic air pollution, which kills thousands in major cities like London. Air pollution contributes to poor health, which in turn affects the country’s workforce. “Clean air zones” or “zero emission zones” may come into effect in cities. Petrol and diesel drivers will either face a ban or have to pay fees to drive in these zones. The government also intends to ban new diesel and petrol cars in Britain from 2040. Over time, the transition to hybrid and electric cars will help to reduce the negative impact of CO2 emissions on the climate.