Tuesday, 28 March 2017

What Car? reveals taxing times ahead

This year on 1st April, new rates of Vehicle Excise Duty (VED) will be introduced … and they could have quite an effect on the tax you pay for your vehicle … 

What Car? had revealed the biggest car tax rises ahead of the new rules. So who will be most affected, and will you be paying more?

• Some models will command almost 25 times more tax than before
Even greener hybrids are hit but still qualify for government grants of up to £2,500
Six out of 10 top sellers incur eye-watering tax increases

Imminent changes to Vehicle Excise Duty (VED) mean consumers have just a few days to secure a deal on a new car before tax rates soar by up to 2475%.

Analysis by What Car? has shown that the cost of taxing a car purchased after 1 April 2017 could be up to 25 times more, with even some of the most environmentally friendly plug-in hybrids commanding sharp tax increases.

It’s conventional hybrids such as the Lexus GS300h and RX450h that will be hit hardest, however. These have traditionally been an attractive option for those seeking a luxury car with small-car 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.

Under the new legislation, only zero-emissions cars costing less than £40,000 will be free to tax, but buyers still have a few days to make significant savings by purchasing before the 1 April deadline, using the new What Car? New Car Buyer Marketplace, which lets people compare discounts from dealers in their area.

In the case of the GS300h hybrid, the near-£1000 hike in the three-year tax bill is made up of a £150 first-year rate based on its CO₂ emissions, followed by two subsequent payments of the new hybrid flat rate of £130 per year, which applies to all vehicles with emissions above 0g/km CO₂.

In addition, all vehicles that cost more than £40,000 are subject to a further £310 a year charge between years two and six. As a result, three-year tax bills on the Porsche Cayenne E-Hybrid, Mitsubishi Outlander PHEV and Volvo XC90 T8 and Audi Q7 E-tron will also 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, and if buyers order before the tax hike they could save almost half as much again.

Motorists who flocked to buy one of Britain’s top sellers in the first months of 2017 are also likely to have avoided a hefty tax premium and could still do so if they move quickly. Six of 2017’s top 10 sellers are among the highest risers. Certain derivatives of the Vauxhall Astra, Ford Focus, Nissan Qashqai, Mercedes C-Class, Audi A3 and BMW 3-Series will command an extra tax bill of between £400 and £1,000 over three years.

What Car? editor Steve Huntingford 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.”

The latest deals can be found at www.whatcar.com/new-car-deals.

Top 10 tax increases

Make/Model
Segment
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
Coupe
Petrol Hybrid
£40
£1,030
£990
2475%
Mercedes-Benz C250d AMG Line Premium 2dr Auto
Coupe
Diesel
£60
£1,060
£1,000
1667%
Mercedes-Benz CLA 45 4Matic Yellow Night Edition 4dr Tip Auto
Coupe
Petrol
£60
£1,060
£1,000
1667%
Lexus RX 450h 3.5 SE 5dr CVT Auto
Large SUV
Petrol Hybrid
£40
£1,030
£990
2475%
Audi A6 3.0 TDI S Line 4dr S Tronic
Executive
Diesel
£60
£1,060
£1,000
1667%
Mercedes-Benz C250d AMG Line Premium Plus 4dr 9G-Tronic
Executive
Diesel
£60
£1,060
£1,000
1667%
Mercedes-Benz E200d AMG Line Premium 4dr 9G-Tronic
Executive
Diesel
£60
£1,060
£1,000
1667%
Lexus GS300h 2.5 F-Sport 4dr CVT
Executive
Petrol Hybrid
£40
£1,030
£990
2475%
Audi A5 2.0 TDI Sport 2dr S Tronic
Conv'tble
Diesel
£60
£1,060
£1,000
1667%
Mercedes- Benz C220d AMG Line 2dr
Conv'tble
Diesel
£60
£1,060
£1,000
1667%

Hybrid tax increases

Make/Model
Segment
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
Large SUV
Petrol Hybrid
£40
£1,030
£990
2475%
BMW X5 xDrive40e SE 5dr Auto
Large SUV
Petrol Hybrid
£0
£970
£970
N/A
Porsche Cayenne S E-Hybrid 5dr Tiptronic S
Large SUV
Petrol Hybrid
£0
£895
£895
N/A
Audi Q7 3.0 TDI Quattro e-tron 5dr Tip Auto
Large SUV
Diesel
Hybrid
£0
£880
£880
N/A
Mitsubishi Outlander 2.0 PHEV 4hs 5dr Auto
Large SUV
Petrol Hybrid
£0
£880
£880
N/A
Volvo XC90 2.0 T8 Hybrid Inscription 5dr Geartronic
Large SUV
Petrol Hybrid
£0
£880

£880
N/A

UK top sellers

Make/Model
Type
Model’s 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
Hatchbck
3
Petrol
£0
£400
£400
N/A
Ford Focus FOCUS 1.5 TDCi 120 ST-Line Navigation 5dr Powershift
Hatchbck
4
Diesel
£0
£400
£400
N/A
Nissan Qashqai 1.5 dCi Acenta [Comfort Pack/Tech Pack] 5dr
Small SUV
5
Diesel
£0
£400
£400
N/A
Mercedes-Benz C350e Sport Premium 4dr Auto
Executive
6
Petrol Hybrid
£0
£895
£895
N/A
Audi A3 1.6 TDI SE 5dr S Tronic
Hatchbck
8
Diesel
£0
£400
£400
N/A
BMW 340i M Sport 5dr Step Auto [Business Media]
Executive
10
Petrol
£555
£1,400
£845
152%


*Sales figures sourced from SMMT cover February 2017 and refer to the sales performance of all derivatives of that model combined. Source: https://www.smmt.co.uk/vehicle-data/car-registrations/ 

**Where the original tax value was £0, a percentage increase cannot be calculated accurately as there is no value for comparison.