[Jules59]

From April 2017
"The set-up means that the first year of vehicle tax will be based on a revised series of 13 emissions bands. The system means that cars which produce between 1-50g/km of CO2 will pay just £10 in the first year, while vehicles at the top end of the spectrum (emitting 255g/km of CO2 and above) will pay £2000 in VED.

In the second year of ownership, cars are split into three categories - Zero Emissions, Standard and Premium. Only cars that emit 0g/km of CO2 will be exempt from tax, while all other cars will pay £140 a year. Cars that cost more than £40,000 will pay a £310 premium on top of this in years 2-6 of ownership. The payment will then revert to £140 from year seven of a car's life."

How is the £40K calculated? (inc VAT -base model or inc the options)

Besides being overly complex (confuse the masses tactic) it seems that a 6 year old top end 320D (60+mpg) will pay £450 but a 2 year old mid spec 335i pays just £140. Does this make any sense to anyone?

[col2611]

I think your tax should be calculated by your mileage as well as emmisions. Because my 335i only does about 3000 a year, yet someone with a "free tax, small diesel" does thousands more miles, kicks out more co2 in the year but pays nothing yet I pay £490 a year!

[Dann]

It's for new cars only:

"Mr Osborne said: "There will be no change to VED for existing cars - no one will pay more in tax than they do today for the car they already own.""

http://www.bbc.co.uk/news/business-33447106

[Aragorn30d]

TBH it makes sense doesnt it?

The existing bands were setup as a "green" initiative. Its worked, as under the existing system 75% of cars sold were in the lowest bands.

This ofcourse means you lose all your revenues if no-ones actually paying any VED.

Under the new system, theres a flat rate of £140 for all cars bar Zero emissions, and the green part still comes into play at point of purchase by having the initial payment based on emissions. Which is more sensible, becuase once a cars built, its built. If you want to be greener, you should aim to stop people buying it in the first place.

The "premium" option is a little odd (especially for the tories), but i guess has been done like that on the grounds that people buying an expensive car can afford to pay more. The premium only applies for the first 5 years though, after that it drops back down to the £140 band.

They've basically moved the system away from being emissions based as it was previously. Which was always kinda stupid, as your already taxed on emissions when you fill up with fuel anyway!

[Rory]

The tax is definately a sore point for us pre lci guys on £490 a year !

I was looking through the stack of old tax discs in my car, and when the previous owner first taxed it in 2008 it was £300. A rise to £490 is a hell of a hike.

I'm another one doing only about 5000 miles a year in my car , I live 2 miles from work and have a z4 I use as well.

[col2611]

I have a work van so there has been times where my car hasn't moved for 2 weeks with shift work and doing weekends. I would rather my tax drop to the new £140. Even a £40k+ car would be cheaper to tax after the first year. I think it's better than the current set up but still not perfect.

It really pains me that I am 1g of co2 away from being in the lower band. I have the more efficient n54 engine (57 onwards) but I have the extra weight of the folding roof! Worth it on days like today though!

[Digitalize]

New system will be much better IMO.

There will be a small slice of cars that will pay more than £140 a year even without the premium addition, but I imagine they'll be things that are ridiculously pollutive.

[Jules59]

Anyone know how the £40K is judged?

[Jules59]

Originally Posted by Dann

It's for new cars only:

"Mr Osborne said: "There will be no change to VED for existing cars - no one will pay more in tax than they do today for the car they already own.""

http://www.bbc.co.uk/news/business-33447106

or any less I guess

[Fantastic]

Originally Posted by Jules59

Anyone know how the £40K is judged?

It's judged on list price, so presumably if you get a decent price under list price you'll still end up paying the premium.

[Digitalize]

Would have to be based on list otherwise it would be ridiculously hard to enforce. Already will be to be honest.

[mjn77]

The £40k+ premium thing is very strange. Why £40k+? Why not £35k or £50k?

But that first year is gonna be a killer for a few people!

[Jules59]

It will be interesting to see how it plays out.

[Sbm007]

Interesting, this is not too bad to be honest as it opens up possibilities to get some of the VED waived/contributed by the dealer when putting in an order so don't really see this being too much of a problem (I can imagine most dealers will be happy to pay some of it if it means a new order).

If dealers do not do this, people on a budget might be reluctant buying new cars and wait for someone else to buy one and sell them, as it means you won't have to pay up to 2K on VED.

I too am interested how they decided on the 40k cut-off, as it has no bearing on the emissions produced... You could buy a 25k car that emits more than a 45k car... a bit daft really.

[HighlandPete]

Originally Posted by Digitalize

Would have to be based on list otherwise it would be ridiculously hard to enforce. Already will be to be honest.

P11D value is already established and understood for working out BIK, so if the same valuation system is used, no real issue.

HighlandPete

[HighlandPete]

Originally Posted by Aragorn30d

.....They've basically moved the system away from being emissions based as it was previously. Which was always kinda stupid, as your already taxed on emissions when you fill up with fuel anyway!

Having a 'road tax' for each car and leaving emissions to fuel use, is more reflective of actual emissions for an individual car, rather than some unrealistic emissions value (NEDC test), which results are immediately skewed by the way we drive.

When the new EU-WLTP (Worldwide Harmonized Light Vehicles Test Procedure) is finally rolled out (due in 2017), the existing system will be obsolete, (even an embarrassment) and require readjusting anyway.

HighlandPete

[AWSAWS]

It's all nonsense considering CO2 is an irrelevant gas. So easy to have a tax for nothing. The people who pulled off this farce must be laughing. They should be taxing real pollutants.
Still the setup of one year this much. Year 7, that much is laughable.

[Jules59]

Originally Posted by HighlandPete

P11D value is already established and understood for working out BIK, so if the same valuation system is used, no real issue.

HighlandPete

Could you tell me what P11D and BIK are please

[Jules59]

Oh yes ofcourse - something to do with company cars etc

[mjn77]

BIK - Benefit In Kind.....perks of the job