22 new cars hit hadest by car tax changes

alibhai/ March 27, 2017/ Web News/ 0 comments

  • Worst affected cars will see three-year tax costs rise from £40 to £1,030
  • Hybrids and other alternative-fuel vehicles to be hit hard by the new directive
  • Lexus dealers are likely to take a significant blow with their conventional hybrids feeling the brunt of the VED changes
  • Even the UK’s best-selling cars will be clobbered by higher tax rates

How much tax we have to pay on our cars is about to change.

Under the new directives that come into force on Saturday, almost all newly-purchased vehicles bar zero-emissions electric and hydrogen cars will cost £140 to tax at a standard rate.

Furthermore, any brand new motor with a list price of more than £40,000 will also be subject to a £310 premium-model surcharge on top of standard car tax for five years after the first of ownership.

It means the amount of tax paid on the worst-hit cars will soar by as much as 2,475 per cent over a three-year spell. And the figures certainly don’t look good for Lexus dealerships.

Clobbered by new car tax: Conventional hybrid models, like the Lexus GS300h pictured, are going to be hardest hit by new VED rules that will be implemented from April 1.

Clobbered by new car tax: Conventional hybrid models, like the Lexus GS300h pictured, are going to be hardest hit by new VED rules that will be implemented from April 1.

New analysis by motoring magazine What Car? has shown that the cost of taxing a car purchased after 1 April 2017 could be up to 25 times more expensive than it has been.

To add insult to injury, some of the most environmentally friendly hybrids – the vehicles MPs are trying to persuade more of us to drive to reduce pollution levels in the country – are those that command the sharpest tax increases.

Cars facing big rises combine both being green and more expensive than £40,000. This charge sheet will hurt a host of mid-range executive cars, from Lexus, Mercedes and Audi.

Conventional hybrids – those that you don’t plug into a power source to replenish the electric charge but instead regenerate electricity through the vehicle’s movements – such as the Lexus GS300h and RX450h will be hit hardest, according to the research.

These models have traditionally been an attractive option for those seeking a luxury car with small-vehicle emissions, because under the outgoing legislation, the GS300h and RX450h cost owners as little as £40 to tax over three years. 

But under the new rules, that increases to £1,030. 

They will then continue to be considerably more expensive to tax for the next three years, while the premium showroom tax still applies, band after that tax will be £130 a year.

Lexus GS300h

Lexus RX450h

Conventional hybrid models – like the Lexus GS300h and RX450h pictured – will suffer under the new directive

Audi A6

Mercedes-Benz C-Class

Models with an RRP of £40,000 or more will be subject to a premium-model additional tax charge. This will have an impact on cars like the Audi A6 and Mercedes-Benz C-Class, both of which feature in the of top 10 models worst hit but the April 1 changes

THE TOP 10 MODELS WORST HIT BY THE APRIL 1 CAR TAX CHANGES 
Make/Model Fuel type Cost of tax for three years 2016/17 Cost of tax for three years 2017/18 Cost increase over three years Percentage Change over three years
Lexus RC 300h 2.5 F-Sport 2dr CVT Auto Petrol Hybrid £40 £1,030 £990 2475%
Mercedes-Benz C250d AMG Line Premium 2dr Auto Diesel £60 £1,060 £1,000 1667%
Mercedes-Benz S300h L AMG Line 4dr Auto Petrol Hybrid £40 £1,030 £1,000 2475%
Lexus RX 450h 3.5 SE 5dr CVT Auto Petrol Hybrid £40 £1,030 £990 2475%
Audi A6 3.0 TDI S Line 4dr S Tronic Diesel £60 £1,060 £1,000 1667%
Mercedes-Benz C250d AMG Line Premium Plus 4dr 9G-Tronic Diesel £60 £1,060 £1,000 1667%
Mercedes-Benz E200d AMG Line Premium 4dr 9G-Tronic Diesel £60 £1,060 £1,000 1667%
Lexus GS300h 2.5 F-Sport 4dr CVT Petrol Hybrid £40 £1,030 £990 2475%
Audi A5 2.0 TDI Sport 2dr S Tronic Diesel £60 £1,060 £1,000 1667%
Mercedes- Benz C220d AMG Line 2dr Diesel £60 £1,060 £1,000 1667%
Source; What Car?           

Under the new legislation, only zero-emissions cars costing less than £40,000 will be free to tax. 

Hybrids, plug-in hybrids and any other alternative-fuel models (including bioethanol and LPG) will qualify for a £10 reduction to the £140 standard-rate tax charge that is effective from the vehicle’s second year.

Other models that will be clobbered by the new rules include the Porsche Cayenne E-Hybrid, Mitsubishi Outlander PHEV, Volvo XC90 T8 and Audi Q7 E-tron – the three-year tax bill on these cars, inclusive of the £40,000-plus premium-car charge, will jump from zero to as much as £1,000.

On the up side, the Audi, Mitsubishi and Volvo remain eligible for a government grant of £2,500 thanks to their low CO2 emissions of less than 75g/km.

Watch out for the options list… 

The premium surcharge will also force buyers to think more wisely about the options they want on their cars from April 1.

Subtle changes to a near-£40,000 standard motor – such as adding bigger wheels or metallic paint – could push the RRP beyond the additional-tax threshold and make it eligible for the £310 extra annual charge over a five-year period.

The Volvo XC90 2.0 T8 Hybrid Inscription 5dr Geartronic is in the list of hybrid models that will be clobbered by the new tax rules

The Volvo XC90 2.0 T8 Hybrid Inscription 5dr Geartronic is in the list of hybrid models that will be clobbered by the new tax rules

THE HYBRID MODELS THAT WILL BE HAMMERED BY TAX INCREASES 
Make/Model Fuel type Cost of tax for three years 2016/17 Cost of tax for three years 2017/18 Cost increase over three years Percentage Change over three years*
Lexus RX 450h 3.5 SE 5dr CVT Auto Petrol Hybrid £40 £1,030 £990 2475%
Lexus GS300h 2.5 F-Sport 4dr CVT Petrol Hybrid £40 £1,030 £990 2475%
Mercedes-Benz S300h L AMG Line 4dr Auto Petrol Hybrid £40 £1,030 £990 2475%
BMW X5 xDrive40e SE 5dr Auto Petrol Hybrid £0 £970 £970 N/A
Porsche Cayenne S E-Hybrid 5dr Tiptronic S Petrol Hybrid £0 £895 £895 N/A
Audi Q7 3.0 TDI Quattro e-tron 5dr Tip Auto Diesel Hybrid £0 £880 £880 N/A
Mitsubishi Outlander 2.0 PHEV 4hs 5dr Auto Petrol Hybrid £0 £880 £880 N/A
Volvo XC90 2.0 T8 Hybrid Inscription 5dr Geartronic Petrol Hybrid £0 £880 £880 N/A
*Where the original tax value was £0, a percentage increase cannot be calculated accurately as there is no value for comparison
Source: What Car?

Some savvy motorists have been reactive to the changes and secured their new cars before the revised vehicle and excise duty rates come into play.

In the first two months of the year, 257,679 new cars have been registered in the UK, which is 1.8 per cent more than in January and February 2016. 

Demand in alternative-fuel models has rocketed by 27.7 per cent in that time, suggesting that many have acted swiftly to get their hands on one of these cars to secure the existing lower rates that could make them free to tax each year.

March results, which will be revealed by the Society of Motor Manufacturers and Traders in a week’s time, are predicted to show a massive spike in sales due to the combination of the new ’17’ registration plate and buyers looking to secure a new car under existing tax rules. 

Purchasing before April 1 is a move that’s likely to have paid off for many motorists, with the changes also having an impact on some of the nation’s favourite cars. In fact, six of 2017’s top 10 sellers are among the highest risers in What Car?’s study.

This includes certain derivatives of the Vauxhall Astra, Ford Focus, Nissan Qashqai, Mercedes C-Class, Audi A3 and BMW 3-Series, all of which will command an extra tax bill of between £400 and £1,000 over three years.

BEST SELLERS THAT WILL BE CLOBBERED BY APRIL 1 VED HIKES
Make/Model Models overall UK sales chart position** Fuel Cost of tax for three years 2016/17 Cost of tax for three years 2017/18 Cost increase over three years % Change over three years*
Vauxhall Astra Astra 1.0T 12V ecoFLEX Design 5dr Easytronic 3 Petrol £0 £400 £400 N/A
Ford Focus FOCUS 1.5 TDCi 120 ST-Line Navigation 5dr Powershift 4 Diesel £0 £400 £400 N/A
Nissan Qashqai 1.5 dCi Acenta [Comfort Pack/Tech Pack] 5dr 5 Diesel £0 £400 £400 N/A
Mercedes-Benz C350e Sport Premium 4dr Auto 6 Petrol Hybrid £0 £895 £895 N/A
Audi A3 1.6 TDI SE 5dr S Tronic 8 Diesel £0 £400 £400 N/A
BMW 340i M Sport 5dr Step Auto [Business Media] 10 Petrol £555 £1,400 £845 152%
*Where the original tax value was £0, a percentage increase cannot be calculated accurately as there is no value for comparison
**Sales figures sourced from SMMT cover February 2017 and refer to the sales performance of all derivatives of that model combined
Source: What Car?

Editor at the car magazine, Steve Huntingford, reckons there’s still time to beat the rises.

He said: ‘The new tax laws are designed to increase the advantage of running a zero emissions car, but they make things much more complicated and push up the price of many ‘bread and butter’ models. Fortunately, there are still opportunities to get a great deal.

‘Buyers still have a small window to snap up a bargain before 1 April, and there are a number of grants for plug-in hybrids at their disposal. 

‘Tax aside, valuable savings can be made by using the What Car? New Car Marketplace to get the best possible price.’

Huntingford’s suggestion is optimistic to say the least – in order to undercut the new rules, a vehicle will need to be registered before the March 31 deadline. 

Turning around in-stock cars in just five days will be very difficult for dealers at this late stage, and it means any order to the factory for a model built to your own specification will definitely not arrive in time to beat the April 1 deadline.

VED TAX BANDS FROM APRIL 1 

 A study by consumer website HonestJohn.co.uk found that seven in ten new car buyers will be paying more tax when changes are introduced to Vehicle and Excise Duty bands in three months’ time.

Why is it happening? 

Because CO2 emissions figures for cars have now dropped so low that many drivers are having to pay very little tax or none at all, which is leaving a void in the Treasury’s income. 

VED BANDS & RATES FOR CARS FIRST REGISTERED FROM APRIL 1 2017
Emissions (g/CO2/km) First-year rate Standard rate
0 £0 £0*
1-50 £10 £140*
51-75 £25 £140*
76-90 £100 £140*
91-100 £120 £140*
101-110 £140 £140*
111-130 £160 £140*
131-150 £200 £140*
151-170 £500 £140*
171-190 £800 £140*
191-225 £1,200 £140*
226-255 £1,700 £140*
over 255 £2,000 £140*
* cars over £40,000 (listed as Premium) pay an annual £310 supplement for the first 5 years at the standard rate (excluding the first year rate). Alternative-fuel models will be subject to a £130 standard rate.
Vehicles built and purchased before 1 April 2017 will not be affected by these rates.
 






Courtesy: Daily Mail Online

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