it’s impossible for diesel cars to avoid new tax surcharge
- Chancellor Philip Hammond said new diesel cars could be subject to higher tax
- Only ‘next-generation cleaner diesels’ can avoid having to go up one tax band
- However, it will be impossible for any diesel car to meet this standard next year
- Some will be £500 more expensive to tax as a result – we’ve found 10 examples
- First year’s car tax will hit £2,000 for some of the most polluting models
The Chancellor said that anyone who buys a diesel car from April 2018 that doesn’t meet a new emissions standard will have to pay tax on it one band higher than before for the first year, in some cases resulting in a £500 increase.
However, this new standard – called Real Driving Emissions Step 2 – isn’t being introduced until 2020, meaning that manufacturers aren’t even having their vehicles tested to meet this measure for another two years.
This will drive up the cost of owning many new diesel cars and some – such as the ten we have identified – will be hit hard by this biggest tax increase
All diesels clobbered by car tax rules: Philip Hammond said only next-generation cleaner diesel cars will be exempt from a hike in first-year VED car tax from April. The only problem is that the measurement doesn’t come into play until 2020
During his Budget statement last Wednesday afternoon, Mr Hammond said: ‘From April 2018, the first year VED rate for diesel cars that don’t meet the latest standards will go up by one band and the existing diesel supplement in company car tax will increase by one percentage point.
‘Drivers buying a new car will be able to avoid this charge as soon as manufacturers bring forward the next generation cleaner diesels that we all want to see.’
But the big problem for car buyers is that the method to test these ‘next generation cleaner diesels’ won’t be in place for more than two years.
In fact, motoring magazine Autocar said that car manufacturers have only just started working on the technology required to meet the new RDE2 standard.
And even if cars do meet the required emissions limits, the certification for RDE2 does not yet exist, making it impossible to prove that any car is exempt.
From April 2018, buyers of new diesel cars will have to pay one tax band higher than a petrol model in the first year. For instance, a car producing 51-75g/km CO2 will need to pay £100 and not £25 in the first 12 months
Mr Hammond’s announcement has caused ‘mass confusion’ in the UK’s £77.5 billion car industry, Autocar said.
Car makers have been unable to comment about the new changes since Wednesday, as there has been no communication from the Treasury about how the new system is going to work.
The RDE2 standard is the second phase of a series of real-world emissions tests that were announced on the back of the VW emissions cheating scandal that broke in September 2015.
The first real-world driving measurement was introduced earlier this year and operates alongside laboratory tests used to produce fuel economy and emissions output figures for all cars sold in the European Union.
Autocar editor Mark Tisshaw said the new Vehicle and Excise Duty changes ‘make no sense’ and the government had missed an opportunity to clarify what the future holds for under-fire diesel cars.
‘If Hammond really was serious about tackling pollution caused by diesel cars, he would have announced incentives around getting older, more polluting vehicles off the road,’ Tisshaw said.
‘He did nothing of the sort, instead focusing on the cleanest, most modern diesels and sparing them tax increases if they meet a certification standard that can’t be tested for until 2020.’
The new real-world driving emissions measurement has been brought in following VW’s test-cheating scam that saw some of its cars produce 40 times the legal limit of damaging nitrogen oxides emissions
Fears of tax on diesel cars has seen new model sales plummet in recent months. In October, year-on-year diesel registrations were down by almost a third, the SMMT said
Sales of diesel cars have plummeted by more than 20 per cent in recent months on the back of consumer fears that these vehicles will be hammered by new toxin taxes and rapidly lose value.
Registrations of alternative fuel vehicles – which include hybrid, plug-in hybrid and electric cars – have been rising gradually, but a lack of choice or compelling financial reasons to choose one mean they only make up around 5 per cent of all new cars being purchased by Britons.
Instead, drivers abandoning diesel are opting for petrol, which will result in an increase in CO2 emissions that are heavily linked to climate change.
The new tax rules could hit nearly three million motorists from next April – two million new car buyers, plus a further 800,000 company car drivers who will also be stung by a 1 per cent rise in company car tax for driving a diesel car.
10 new diesel cars hit hardest by tax changes
The changes to first year rates for VED from April next year will see the most efficient diesels cost no more than an additional £20 to tax for the first 12 months.
However, any model that emits between 191 and 225g/km CO2 will be subject to an increase from £1,200 for the first year to £1,700 – the biggest financial leap of any of the bands.
So which cars will be affected by this hike?
This is Money has trawled through all the new cars that will be available with an 18-plate next year that fit into this emissions category.
Most are powerful, premium SUVs, though there are some affordable cars – especially those owned by large families – that will fall foul of the government’s changes.
Audi SQ7 and Bentley Bentayga SUVs
Left: The Audi SQ7 (£88,295) produces 199g/km CO2, so buyers will be stung with an extra £500 for first year car tax. Right: The 4.0-litre V8 Bentley Bentayga is the most expensive car in the list at £137,055. It produces 210g/km CO2
Hyundai i800 MPV and Range Rover Sport
Left: The Hyundai i800 is a large-sized MPV for big families costing £27,945. The 2.5-litre automatic diesel emits 225g/km CO2, so it will be subject to the £500 first-year VED increase. Right: The Range Rover Sport HSE 2.0-litre diesel has 300hp, a £62,650 and CO2 emissions of 211g/km
Range Rover and Mercedes-Benz GLS
Left: The Range Rover isn’t a cheap car. This 4.4-litre SDV8 Vogue diesel is £86,700 and emits 219g/km CO2 – so you’ll have to pay an extra £500 in tax next year if you want one. Right: Mercedes’ posh MPV, the GLS, slips into this £500-premium tax band. The GLS350 AMG-Line automatic costs £71,430 and emits 199g/km CO2
Porsche’s posh Cayenne and Ssangyong’s affordable SUV
Left: The Porsche Cayenne is a popular choice for premium buyers, The 4.2-litre S Diesel costs £68,022 and emits 209g/km CO2, so falls into the tax band with the biggest first-year price jump. Right: The Ssangyong Rexton is similar in size to the Cayenne but costs less than half as much. This 7-seat SUV is £27,500 but with CO2 of 208g/km falls into the pricey tax band
Ssangyong Turismo MPV and Toyota Land Cruiser
Left: Another entry from Ssangyong, though this time it’s a family-friendly 7-seat MPV that costs £23,250. The Turismo, fitted with a 2.2-litre diesel engine in EX spec and an auto gearbox, emits 196g/km CO2. Right: Again, the Toyota Land Cruiser is a more affordable 7-seat option, with this 2.8-litre diesel priced at £39,430. However, with emissions of 194g/km CO2, it will be subject to the £500 tax hike
Courtesy: Daily Mail Online