Road tax: New rules could cost drivers thousands of pounds
New Vehicle Excise Duty regime includes an element of 'luxury tax' on cars costing over £40,000
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Forthcoming changes in the way road tax is calculated could cost you thousands of pounds.
That’s the stark reality of the new Vehicle Excise Duty regime for cars registered from 1 April 2017 onwards.
The new rules include an element of ‘luxury tax’ on cars costing over £40,000. Buy one of these, and you’ll pay £450 a year for the next half a decade.
At least you know where you stand, though, right?
Wrong.
You could still be snared if you buy a car costing less than forty grand. All you have to do is get carried away by the options list.
The taxable value of your car will be based on its list price including all those options. And if you buy something in the mid-30s and throw a few extras at it, you could easily find yourself crossing the line.
Depending on what you’re buying, that could mean the difference between paying £140 a year in road tax – and that altogether less palatable £450.
In an extreme example, one single £50 option on a £39,995 car would end up costing you £1600 over five years.
What if you’re a skilled haggler and manage to get your car at a tidy discount? The taxman doesn’t care. List price is all – so whatever you really paid, his clipboard is judge and jury.
And, you’d think, for the options lists on an awful lot of executive cars, the executioner.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments