Know your road tax rates

Know your road tax rates

The 2013 Budget earlier this year bought in some changes to the cost of road tax, or vehicle excise duty (VED), and while the increases – linked to the Retail Prices Index (RPI) – aren’t huge, there is more money to pay for most of us, so it’s best to avoid any surprises and check the table below. The alternative fuel discount remains the same at £10, and all of the new prices apply from April 1.

For the next couple of years at least, the road tax increases will continue to be linked to the RPI, and therefore inflation, and without a major review planned by the Government in the near future. So, in short, if we get a road taxation rise in the next few years it will be in line with inflation, so potentially not too big. The RPI price rises apply to both the standard VED rate, as well as the first year rate for brand new vehicles from the showroom.

It’s all based on CO2 (carbon dioxide) emissions, of course, and for vehicles with CO2 emissions of up to 130g/km, the first year rate of road tax stays at zero. Next up, we have vehicles with CO2 emissions from 131g/km to 165g/km and these will be hit by a first year rate rise of £5. The next step up the taxation table is for vehicles polluting to the tune of 166g/km to 185g/km, and these cars will see a slightly larger increase, at £10.

As engine size and the potential to pollute grows, so does the tax. For cars producing 186g/km to 200g/km of CO2 there will be an extra £15 to pay, while those making between 201g/km to 225g/km, the price goes up to £20. The increases in road tax costs continue inline with CO2 output, with cars producing between 226g/km to 255g/km now being charged an extra £25, with the top banding for outputs of CO2 greater than 255g/km, the first year rate rises from £1,030 to £1,065; a full £35.

These tweaks to the road taxation pricing structure are all about encouraging the purchase and use of less polluting cars, and so the standard rate of road tax for cars producing up to 120g/km of CO2 has not seen an increase. After that, while the rises are quite small, they are there to remind buyers that it’s a case of the lower the better when it comes to CO2, with £5 increases in every band up to the 185g/km mark. Bigger vehicles with CO2 emissions from 186g/km up to 225g/km are hit with a £10 increase, while there is £15 extra to pay for vehicles rated between 226g and 255g/km.

For the most polluting vehicles, in the very top band of the table, with 255g/km of CO2 or more coming out of the tailpipe, the new standard rate of road tax is now £490; an increase of £15, from £475.

As usual, there is a much more basic system for cars that were registered before March 1, 2001, with only two road tax bands to look at. But, both bands see an increase for the 2013 – 2014 tax year, in the UK.

Older cars with an engine size up to 1,549cc will now cost £140 per year to tax; an increase of £5 from last year, while cars with engines of 1,549cc or more will be taxed to the tune of £225 per year; another increase of £5.

 

Road tax rates from April 1, 2013

VED Band     CO2 Emissions          Annual rate    First year rate

A                     Up to 100                    £0                    £0

B                     101-110                       £20                  £0

C                     111-120                       £30                  £0

D                     121-130                       £105                £0

E                     131-140                       £125                £125

F                      141-150                       £140                £140

G                     151-165                       £175                £175

H                     166-175                       £200                £285

I                       176-185                       £220                £335

J                      186-200                       £260                £475

K                     201-225                       £280                £620

L                     226-255                       £475                £840

M                    Over 255                     £490                £1,065

 

Posted by Sebastian Turkenburg