What are the new car tax rates?
The new car tax rates have been released. And there are some changes that drivers need to be aware of. These new rates will affect both petrol and diesel cars, so it’s important to know what they are. In this article, we’ll explore the new car tax rates for autumn 2022 and what they mean for you. So if you’re planning on buying a new car, or you’re just curious about the new rates, read on for more information.
How will the new car tax rates affect you
The main announcement in the Autumn Statement for motorists was the end of the road tax exemption for electric vehicles. All vehicles, whether they are powered by petrol, diesel, or electricity, will be required to pay the annual Vehicle Exercise Duty (VED) starting in April 2025. These will be based on the CO2 emissions of the car, and there are three tiers: zero-emission (electric), standard (petrol/diesel), and high (cars with higher CO2 emissions).
So, if you're planning on buying a new car, make sure to check the CO2 emissions of the model you're interested in to see how much road tax you'll be paying.
Company car tax changes
But how will these rates affect company cars?
Electric cars and ultra-low emission vehicles (which release 75g/km or less of CO2) will go up by 1% in the 2025–2026 fiscal year, and 1% more each year until 2028. EVs will therefore be subject to a maximum Benefit-in-Kind (BiK) rate of 5% in 2027–2028 and a maximum BiK rate of 21% for low-emission cars.
There will also be a similar change for petrol and diesel cars. A 1% increase in company car tax is going to be implemented with no additional increases beyond that. But this isn’t the only news. The 37% tax threshold upper limit will stay the same.
How is road tax calculated
There are a few different factors that go into calculating road tax, or VED, in the UK. The first is the type of fuel your car uses - petrol, diesel, or alternative fuel. The second is the carbon dioxide emissions of your car. This is measured in grams per kilometre (g/km). And the third is the date your car was registered.
For cars registered on or after 1 April 2017, VED rates are based on CO2 emissions and start at £140 for cars with emissions of 0-50 g/km. For example, a petrol car with emissions of 120 g/km would cost £200 in road tax.
Diesel cars registered before 1 April 2017 are taxed at a flat rate of £140, regardless of their emissions. However, diesel cars registered on or after 1 April 2017 will be subject to higher rates of VED if they emit more than 130 g/km of CO2. For example, a diesel car with emissions of 160 g/km would cost £500 in road tax.
What are the current car tax rates bands
How much carbon dioxide your car emits will determine how much you pay. The higher the number, the more emissions your car produces and the higher the tax rate.
As of April 1st, 2022, the road tax rates for cars are as follows:
0-50 g/km CO2: £0
51-75 g/km CO2: £15
76-90 g/km CO2: £25
91-100 g/km CO2: £110
101-110 g/km CO2: £130
111-130 g/km CO2: £145
131-150 g/km CO2: £160
151-170 g/km CO2: £175
171-190 g/km CO2: £205
191-225 g/km CO2: £515
226+g/km CO2: £830
What are the current car tax rates bands
As all types of cars will be subject to VED, it might be time to start seeking new ways to save money. Why not start with fuel? With a fuelGenie or fuelGenie+ card, you can save money every time you fill up. So, apply for yours today!
