The Government has released information around rising taxes for drivers, with some common models from Ford and Vauxhall being forced to dish out more money on their first year of ownership
Several drivers could be faced with a new huge tax burden as the Government supposedly push towards electric vehicle usage.
The Government has officially released plans to introduce a first-year Vehicle Exercise Duty (VED) for several new cars. This new tax will not only apply to petrol, diesel and hybrid vehicles, with electric being previously exempt – but no longer. A car’s first-year tax figure is calculated by considering the amount of CO2 it produces. Cars emitting between 111g and 150g/km pay £220. Those that emit more than 255g/km pay £2,745 for their first year.
Despite being previously free, buyers of electric vehicles are now forced to pay £10 for their first year’s VED from April and that rate has now been frozen. In contrast, all other rates of first-year VED are set to rise massively with rates for petrol, diesel and hybrid vehicles also all being increased – with most doubling in price.
Car Dealer Magazine was previously told by a Treasury spokesperson that the change means, from April next year, a new Ford Puma driver can expect a first-year VED rate rise over £200 – from £220 to £440. A new Range Rover owner could pay as much as £5,490 – up from £2,745 – in that first year of ownership.
The Government also have an expensive car supplement. Any car worth over £40,000 pay an extra £410 a year for the first five years£40,000 pay an extra £410 a year for the first five years. This tax, which has been around for a while, will not be extended to electric vehicles.
Environmentally minded drivers are exempt, however that might not be guaranteed for long. The government has said that this could be introduced to electric vehicles at a future ‘fiscal event’.
Chancellor Rachel Reeves told MPs in her Budget statement: “To help drive the transition to electric vehicles the government is strengthening incentives to purchase EVs by widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars.
“The government is also maintaining EV incentives in the Company Car Tax regime and extending 100% First Year Allowances for zero emission cars and EV charge points for a further year.”
If drivers purchase a new car, including add ons, for a price of more than £40,000, they will have to pay extra. This price has not been altered with inflation, meaning some Vauxhall Astra PHEVs could be considered a luxury car. Same for some Ford models.
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