Changes to the car tax system in 2017
Mr. George Osborne, former Chancellor of the Exchequer, announced a significant change in the way vehicles were taxed in the UK, known as VED (Vehicle Excise Duty). Mr. Osborne announced this change in the last summer. The new rule will be introduced on 1st April 2017.
Here are the things you need to know
Do the new car tax changes will apply throughout the UK in 2017?
Yes, this system will be the same as in Wales, England, and Scotland. But, the drivers of Northern Ireland will have to display their MoT discs, but it is not mandatory to show their tax discs.
The Auto Express consumer team have looked into the new car tax bands, and who stands to lose out the most. The consumer team have done calculations for eight different types of car, from superminis to SUVs. Buyers of smaller, more economical cars will face the biggest tax hike – in some cases, more than nine times what they’re paying now. Owners of higher polluting cars will still pay more under the new laws, but less so than the lower powered cars.
|Highest proportionate increase||CO2 emissions||Current First Year Rate||New First Year Rate||Three years’ tax current rate||Three years’ tax new rates||% change three year ownership|
|Peugeot 208 1.2 PureTech (82) Allure||104g/km||£0||£140||£40||£420||950%|
|Ford C-Max 1.5TDCi (120) Zetec||105g/km||£0||£140||£40||£420||950%|
|Lexus IS 300h Hybrid auto Luxury||103g/km||£0||£140||£40||£420||950%|
|VW Passat 1.6 TDI S||105g/km||£0||£140||£40||£420||950%|
|Nissan Qashqai 1.6 dCi (130) N-Connecta||115g/km||£0||£160||£60||£440||633.3%|
|Lowest proportionate increase|
|SEAT Alhambra 1.4 TSI (150)||150g/km||£145||£200||£435||£480||10.3%|
|Ford Mondeo 1.5 EcoBoost Titanium||
|Jaguar XE 2.0i R-Sport (auto)||
|Toyota Verso 1.6 V-Matic Icon||154g/km||£185||£500||£555||£780||40.5%|
|Honda CR-V 2.0 i-VTEC SE 4WD||173g/km||£300||£800||£720||£1,080||50%|
How do you know that your road tax is due?
You will be sent a reminder from DVLA when your digital tax disc is about to expire. You can also visit the official website of DVLA and you can enter the details of your car such as the registration and make of your car to check whether your car has up to date payments. You will also be notified when you need to make the payment for your MoT.
Is there any change in the payment system?
You can make the payment via direct debit. You also get to make savings and as long as your MoT is valid, you don’t need to worry about your road tax getting expired. If you have plans to sell off your car, make sure you have informed DVLA and your bank about it. This will ensure you are not making payments more than what you actually owe. Fleet cars and HGVs cannot be taxed via direct debit.
Is there any downfall of this system?
Yes, this tax change also comes with some downfalls. If the buyer is transferring its vehicle, now road tax will no longer be transferred. This means the buyer won’t be profited if there are some unused months left on the tax disc. In this case, they will have to renew their tax. The seller can also claim a refund from DVLA if there are any full calendar months left on the vehicle’s tax but will be deprived of the remainder of the current month.
With the coming of new rules, there has been bewilderment all around and these rules are believed to be the reason behind the significant rise in the prosecutions for the untaxed vehicles. As per the data by AutoExpress, in just six months there have been more than 11,000 enforcement cases registered following the scrapping of the tax disc. The number of out-of-court settlements has also risen significantly in the six months period. DVLA blamed the system shake-up behind the significant surge.
Mr. Edmund King OBE who is the President of AA said that all those people who deliberately evade paying taxes should be punished. But, DVLA also said that it is a harsh decision for all those who may not be aware of this change.
What will happen when I buy or sell a car?
Now, it is important you have taxed your vehicle before you actually take it out on the roads. In order to do this, there is a requirement of an 11- digit reference number if the vehicle is registered in your name or the 12-digit reference number mentioned on the new keeper supplement slip.
You also have the provision of taxing your vehicle online or over the phone by dialing DVLA’s contact number 03001234321. You will have to go through the same process in case you are borrowing the car from one of your family members or it has handed over to you free of charge. It is important for the owners to inform DVLA in case the vehicle is being sold or you are giving away to someone.
VED car tax rates – for cars registered on or after 1 April 2017
You can find full tables for the current car tax rates by clicking here.
Is there any grace period?
As per British Vehicle Rental and Leasing Association, there is no provision of a grace period.
How much is the road tax?
At the moment, the rates will entirely depend on the official CO2 emissions quote for the vehicle. For both the diesel and petrol cars, it is 13 bands. Even if you have purchased a new car, you can face charges up to a maximum of £1,100. You can refer the DVLA website to get familiar with the rates.
However, the system is all set to undergo a change. From April 2017, for most of the cars, a flat rate of £140 will be introduced and the new car owners may have to pay a yearly price of £2,000.
The government has said that they have made the changes in order to bring a fair system and they want the drivers to buy only the cleanest cars. The funds raised will go to the Roads Fund, the government promised that every single penny will be used for the betterment of the roads and highways.
What about the classic cars and other tax exemptions?
If you are an owner of the vehicle that has been exempted from the vehicle excise duty then you don’t have to pay a single penny. But, it is important they have registered, each year, on the official website of DVLA.
How will the new road tax system enforced?
With the help of ANPR (Automatic number plate recognition) cameras, people who haven’t paid will be caught and a fine up to £1,000 will be imposed on the culprits.
How do I make a Statutory Off Road Notification (SORN)?
If you are not using your vehicle on the public roads or you don’t want to pay the road tax, you can make a SORN (Statutory Off Road Notification). You might be mothballing your old car for the winter or might be using the vehicle on the private land only. You have to make sure that your vehicle should be kept off the road, even if you are no longer using it.
In order to make a SORN, you can apply online using your 16-digit reference number that is mentioned on the vehicle tax renewal letter. You can also call dvla 03001234321 or you can also send a SORN application to DVLA.
What about driving abroad?
European countries require some type of tax disc or a sticker on your vehicle’s windscreen and motorists are fearful that the foreign police might doubt at their vehicles if they are not having any documents related to the tax. In reply, British Government said that the European authorities have already been informed about this change.
How do I know if my vehicle is taxed correctly?
With the help of DVLA’s Vehicle Enquiry System, you can have a look at the status of your vehicle. You will also get a renewal reminder as and when your tax is about to expire.