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Car tax disc

The £100 million question: why is car tax evasion rocketing?

Car tax discThe government told us eliminating the paper tax disc would save the country £10 million a year: hurrah! What a pity latest stats from the Department for Transport reveal a potential revenue loss of £107 million per year caused by tax evasion. Drat!

That £107 million figure is easily the greatest amount lost to tax evasion in at least a decade.

The scale of the problem is enormous: in 2013, 0.6 percent of vehicles on British roads were observed to have evaded paying Vehicle Excise Duty (VED). That grew to 1.4 percent in 2015. In 2017, that figure’s grown further, to 1.8 percent. Which is equal to around 750,000 vehicles.

Even the DfT seems surprised by the increase: It observes “the number of vehicles evading is significantly higher in comparison to 2015”. Compared to 2013, it fails to add, it’s even more significantly higher.

A potential loss of £0.1 billion a year because of 750,000 people not paying their road tax is a serious issue in anyone’s book. Now, the DfT does add that it can’t say for sure whether £107 million is the actual loss, because some of that revenue may have been recovered through DVLA enforcement, or through guilty owners paying up later.

But it’s still not small change. And it’s still tripled since the paperless car tax system was introduced in October 2014. Question is, why are the rates rocketing? The paperless system is undoubtedly the cause, but what aspect of the system is causing so many tens of millions to be lost?

Paperless car tax evasion: the causes

Forgetfulness

Fifty-two percent of the unlicensed vehicles caught had been without road tax (VED) for less than two months. The next highest figure is two-to-four months, way back on less than 20 percent.

This indicates that the power of the visual reminder on a car windscreen was significant – probably much more so than DfT officials expected. Eventually, people will be alerted that they’re driving around in an untaxed car – perhaps at MOT or car insurance renewal time – but it seems the initial forgetfulness factor is high.

Reminder letters are sent out when VED tax is due, but it seems these aren’t enough to chivvy people into sorting their car tax promptly. Maybe they’re sent out too early, duly filed and themselves forgotten about…

Not understanding the change of owner rules

Under the new rules, car tax is not transferred to the new owner when a car is sold. The original owner instead receives a refund, meaning the car automatically becomes untaxed when the DVLA receives the paperwork.

Some motorists don’t realise this – 15 percent of the 750,000 vehicles caught were spotted after a licence refund had been issued, and no subsequent licence had been taken out. However, this pales compared to the 70 percent of cars simply driving around after the tax had expired – and the fact this 15 percent figure is almost half what it was in 2015 suggests motorists are becoming familiar with the new system. It’s not the root cause of why there are now so many untaxed cars on our roads.

Direct Debit foibles

Motorists can now pay for road tax via Direct Debit: 13 million were taken out in 2016/17. Could tech problems with the system be causing evasion rates to go up? It seems not: the DVLA says it “actively pursues” any lapsed payments – and the fact that so many millions of organised people are signing up to have their VED paid automatically should theoretically mean the evasion rate ought to stabilise or even go down, rather than skyrocket…

Budget-crunched motorists

Fifty-one percent of unlicensed cars caught were aged 10 years or more. In contrast, 24 percent of licenced vehicles were aged 10 years or more. Maybe older, cheaper cars are being driven by those with less disposable income? And maybe cash-stricken motorists are thus being unavoidably forced into taking a chance that they won’t be caught?

Car tax is not cheap: the cost for a vehicle built between 2001 and 2017, emitting 226g/km CO2 or more, is over £500. Given the real terms fall in wages, that’s an enormous sum for those just about managing.

Oh, and what about motorcycles?

If you think tax evasion is bad for cars, just look at bikes: 5.8 percent of motorcycles are reckoned to be evading VED. Admittedly, says the DfT, it’s harder to collect tax for bikes than it is for other vehicles, but it’s still a fair indication of a higher evasion rate for motorcycles.

Eleven percent of all unlicensed vehicles had been so for more than a year. Look to motorcycles, and that figures rockets to 38 percent…

In a sense, it’s perhaps inevitable: if the policing system for VED evasion partly relies on ANPR, the fact bikes have half the number of registration plates as cars means they are, in theory, half as likely to be caught by police cameras.

So what’s the answer?

The treasury will be keen to solve this dilemma, particularly as the amount lost due to licence evasion has gone up so dramatically. The answer, it seems, is simply a better reminder system.

Motoring Research has one idea that might work: a brightly-coloured piece of paper on the windscreen telling everyone who looked at it if the vehicle was licenced or not, instantly, at a glance. Even if the car’s owner forgot, their partner, or kids, or neighbours might spot it. It would be very obvious indeed if you’d evaded road tax – and who wants the embarrassment of displaying to the world that they’re a tax-dodger?

We estimate it could only cost £10 million a year to enact, a mere fraction of the amounts being lost to road tax evasion. It’s such a strong idea, we’ll certainly be sending it on to the DfT. We’ll let you know how we get on.

>NEXT: The smart motorways most likely to hit you with a ticket

Revealed: the cars hit hardest by new tax rules

Revealed: the cars hit hardest by new tax rules

Research by What Car? has revealed that the cost of taxing a new car after 1 April 2017 could be up to 25 times more expensive, with even environmentally-friendly plug-in hybrids facing stiff penalties. Vehicle tax for the first year is based on CO2 emissions, but after that the rate depends on the type of vehicle.

From year two it’ll cost £140 for a petrol or diesel car, £130 for an alternative fuel vehicle and £0 for vehicles with zero CO2 emissions. Crucially, all cars with a list price of more than £40,000 will be subject to an £310 surcharge for five years from year two. Read on to discover the top 10 tax increases. Buy now or pay later…

10. Lexus GS 300h 2.5 F-Sport 4dr CVT: £990 increase

Register a Lexus GS 300h before the end of March and you’ll pay just £40 in tax over the first three years. Under the new Vehicle Excise Duty (VED) rates, that figure increases to £1,030, an astonishing 2,475% change over three years.

9. Lexus RX 450h 3.5 SE 5dr CVT Auto: £990 increase

As What Car? is keen to point out, conventional hybrids such as the Lexus GS 300h and RX 450h will be hardest hit, meaning luxury cars with low emissions will be less attractive than before. It’s another 2,475% change for this luxury SUV.

8. Lexus RC 300h 2.5 F-Sport 2dr CVT Auto: £990 increase

8. Lexus RC 300h 2.5 F-Sport 2dr CVT Auto: £990 increase

The three-year cost of £1,030 is made up of a £150 first-year tax rate based on its emissions, followed by two subsequent payments of the new hybrid flat rate of £130. Further misery comes in the form of the £310 a year charge for cars costing more than £40,000, payable between years two and six.

7. Mercedes-Benz C220d AMG Line 2dr: £1,000 increase

There’s worse news if you’re thinking of buying a Mercedes-Benz C220d Convertible in April, with the AMG Line model subject to a £1,000 increase in tax. Buy now and pay £60. Buy in April and pay £1,060, which represents a 1,667% hike.

6. Audi A5 2.0 TDI Sport 2dr S tronic: £1,000 increase

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 prices of many ‘bread and butter’ models.”

5. Mercedes-Benz E200d AMG Line Premium 4dr 9G-Tronic: £1,000 increase

5. Mercedes-Benz E200d AMG Line Premium 4dr 9G-Tronic: £1,000 increase

The new VED rates apply to all new cars registered on or after the 1 April 2017, but do not affect old cars or new cars registered before or on the 31 April 2017. Be quick and you can escape the increase.

4. Mercedes-Benz C250d AMG Line Premium Plus 4dr 9G-Tronic: £1,000 increase

The £310 surcharge for cars costing more than £40,000 will affect drivers of even the most fuel efficient vehicles. Take the Tesla Model S, for example, which, while free to tax in year one, will cost £310 a year between years two and six.

3. Audi A6 3.0 TDI S Line 4dr S tronic: £1,000 increase

The Audi A6 3.0 TDI with the S tronic transmission will jump from £60 to £1,060, a percentage change of 1,667%. Head down to your Audi dealer before the end of the month to escape the hike.

2. Mercedes-Benz C250d AMG Line Premium 2dr Auto: £1,000 increase

2. Mercedes-Benz C250d AMG Line Premium 2dr Auto: £1,000 increase

Under the current scheme, all cars with sub 130g/km CO2 emissions are exempt from VED in the first year, with sub 100g/km cars free of tax from year two. From 1 April, only cars with zero emissions are tax exempt. This is why luxury cars with low emissions are the hardest hit.

1. Mercedes-Benz S300h L AMG Line 4dr Auto: £1,000 increase

Your typical Mercedes-Benz S-Class owner is unlikely to be too bothered about VED costing 25 time more than before, but £1,000 remains a chunky wedge of cash to find over three years.

Which hybrid cars will cost more to tax?

Which hybrid cars will cost more to tax?

The £310 surcharge for vehicles costing more than £40,000 is going to hit buyers of luxury hybrid models in the wallet. On the flip-side, some vehicles will be eligible for a government grant of £2,500 if their CO2 emissions are less than 75g/km. What Car? has provided details of six popular hybrid and plug-in hybrid models.

Volvo XC90 T8 Hybrid Inscription 5dr Geartronic: £880 increase

Register a Volvo XC90 T8 before the end of March and you’ll pay nothing in VED. From April, you’ll pay £880 for the first three years. Our advice is simple: buy now.

Mitsubishi Outlander PHEV 4hs 5dr Auto: £880 increase

It’s a similar story for the Mitsubishi Outlander PHEV, which goes from zero to £880 overnight. Makes that £2,500 grant seem even more appealing.

Audi Q7 3.0 TDI Quattro e-tron 5dr Tip Auto: £880 increase

Audi Q7 3.0 TDI Quattro e-tron 5dr Tip Auto: £880 increase

Without wishing to sound like a broken record, it’s the same story for the Audi Q7 e-tron. Although the 48g/km Q7 is tax exempt in year one, it costs £130 from year two and is also subject to the £310 surcharge for cars costing more than £40,000.

Porsche Cayenne S E-Hybrid 5dr Tiptronic S: £895 increase

Thanks to CO2 emissions of 75g/km, the Porsche Cayenne S E-Hybrid is subject to a first year alternative fuel VED rate of £15, which makes it slightly more expensive than the Audi Q7 e-tron.

BMW X5 xDrive40e SE 5dr Auto: £970 increase

At 78g/km CO2, the BMW X5 xDrive40e is even less efficient than the previous two cars and slots into the fourth tier of the new VED tax bands. Alternative fuel cars emitting between 76 and 90g/km will pay £90 in year one.

Lexus RX 450h 3.5 SE 5dr CVT Auto: £990 increase

Lexus RX 450h 3.5 SE 5dr CVT Auto: £990 increase

It’s the Lexus RX 450h once again, and a reminder of that 2,475% increase in VED.

Britain’s best-sellers

Buyers of Britain’s most popular cars won’t escape a tax penalty, with six out of the top 10 best-selling vehicles set to incur eye-watering tax increases. As the What Car? analysis reveals certain derivatives of the top-sellers will command an extra tax bill of between £400 and £1,000 over three years.

Vauxhall Astra 1.0T ecoFLEX Design 5dr Easytronic: £400 increase

Register a Vauxhall Astra with a 1.0-litre turbocharged engine and Easytronic transmission before the end of March and you’ll pay no VED. From April, you’ll pay £400.

Ford Focus 1.5 TDCi 120 ST-Line Navigation 5dr Powershift: £400 increase

Ford Focus 1.5 TDCi 120 ST-Line Navigation 5dr Powershift: £400 increase

The same penalty applies to the Astra’s chief rival, the Ford Focus. From zero to £400 overnight.

Nissan Qashqai 1.5 dCi Acenta (Comfort/Tech Packs) 5dr: £400 increase

Britain’s most popular crossover will be slightly less attractive in April. Well, buyers will be £400 worse off.

Audi A3 1.6 TDI SE 5dr S tronic: £400 increase

And, the same is true of the Audi A3 1.6 TDI in SE trim and when fitted with the S tronic transmission.

BMW 340i M Sport 5dr Step Auto (Business Media): £845 increase

BMW 340i M Sport 5dr Step Auto (Business Media): £845 increase

Right now you’ll pay £555 to tax a BMW 340i M Sport for the first three years, but that figure rockets to £1,400 in April. That’s an increase of 152%.

Mercedes-Benz C350e Sport Premium 4dr Auto: £895 increase

And finally, the Mercedes-Benz C350e hybrid shoots from zero to £895. Remember, the new VED rates apply to vehicles registered on or after 1 April 2017, so there’s still time to beat the taxman. Just.

10 great value low emissions cars to buy NOW

10 great value low emissions cars to buy NOW

10 great value low emissions cars to buy NOWSome motorists could be in for a nasty surprise when it comes to renewing their Vehicle Excise Duty (VED). Under the current rules, cars that emit less than 100g/km CO2 are exempt from tax, making them very attractive to new car buyers.

From April 1, 2017 only cars with zero emissions will be free of tax, striking a major blow for those driving low emissions cars. If you haven’t done so already, check out the new tax rules, as it could save you hundreds, if not thousands of pounds over the coming years. In short, you should buy a low emissions car by the end of March, and here are ten great value cars to get you started.

Toyota Prius Active: 76g/km10 great value low emissions cars to buy NOW

Hybrid and plug-in hybrid buyers will be feeling the pinch from April 1, as even the greenest vehicles will be subject to some kind of tax. In the majority of cases, the Toyota Prius emits 76g/km CO2, putting it on the cusp of the fourth tier tax band.

Buy a Prius today and you’ll pay no tax whatsoever. Purchase the same car in April and you’ll pay £100 in the first year, and the new standardised £140 flat rate from year two. Downgrade to the smaller 15-inch alloy wheels and the CO2 emissions drop to 70g/km, saving you £75 in the first year.

Suzuki Celerio SZ3 1.0 Dualjet: 84g/km10 great value low emissions cars to buy NOW

The Suzuki Celerio is a no-frills, low-thrills city car, designed for people who want nothing more than a vehicle to get from A to B. Prices start from just £6,999, but we’d recommend spending an extra £2,000 for the mid-range SZ3 trim level and excellent 1.0-litre Dualjet engine.

CO2 emissions are a hybrid-troubling 84g/km, which means you don’t have to pay a penny of tax. But be quick, because under the new rules you’ll pay £100 in the first year, followed by an annual fee of £140. In three years, you’ll be £380 worse off.

Hyundai i10 SE Blue: 93g/km10 great value low emissions cars to buy NOW

The recently revised Hyundai i10 is one of the best city cars on the market, especially in the tech-laden Premium SE trim. But if you’ve got one eye on the household budget, you should opt for the SE Blue, powered by a 1.0-litre engine. It’s the only i10 to slot into the lowest tax band, while a group two insurance rating means it’s one of the cheapest cars to run.

Sadly, come April, you’ll be asked to fork out £120 in first-year VED, followed by the £140 standard rate. On the plus side, a list price of £10,845 isn’t going to break the bank.

Skoda Superb Estate SE 1.6 TDI GreenLine: 97g/km10 great value low emissions cars to buy NOW

The Skoda Superb is one of our favourite cars at any price, offering an unbeatable blend of practicality, value and specification. It’s amazing to think that you can own something quite so cavernous and yet pay nothing in car tax. A list price of £24,725 is nothing short of sensational.

The Skoda Superb with the fuel-sipping GreenLine engine is tax exempt until April, at which point it is subject to a so-called ‘showroom tax’, which is based on CO2 emissions. The higher the emissions, the more you’ll pay. In the case of the eco-friendly Superb you’ll pay £120, followed by £140 for each year thereafter.

Dacia Sandero Ambiance dCi 90: 90g/km10 great value low emissions cars to buy NOW

The Dacia Sandero is famously Britain’s cheapest new car, with prices starting from £5,995 for the basic Access trim level. The most efficient models are powered by the dCi 90 1.5-litre turbocharged diesel engine, with CO2 emissions of just 90g/km.

You’ll have guessed already that is a car that you need to buy before the end of March, unless you’re happy to pay £380 in tax over the first three years.

Mazda3 1.5 Skyactiv-D: 99g/km10 great value low emissions cars to buy NOW

In a sector dominated by the Ford Focus, Vauxhall Astra and Volkswagen Golf, you’d be forgiven for forgetting the Mazda3. But overlook it and you’ll be missing out on one of the sharpest looking and sweetest handling cars on the market.

The 1.5-litre Skyactiv-D engine is a tad underpowered, but with CO2 emissions of just 99g/km, it takes the crown as the most efficient in the range. Buy now, or pay later.

Kia Cee’d ‘2’ 1.6 CRDi: 99g/km10 great value low emissions cars to buy NOW

The Kia Cee’d is another five-door hatchback that’s often overlooked in a crowded segment. Buy a Kia and you tend to get far more for your money, while enjoying the company’s famous seven-year warranty.

The Cee’d ‘2’ 1.6-litre CRDi emits 99g/km CO2 and costs £19,095. Order the car today and you’ll pay nothing for the duration of the warranty. Register the same car in April and you’ll have paid £960 by the time the warranty has expired. Makes you think, doesn’t it?

Fiat Panda Easy 0.9 TwinAir: 99g/km10 great value low emissions cars to buy NOW

The lovable Panda is set to be refreshed in 2017, so the chances are you’ll be able to negotiate a good deal at your local Fiat dealer. Prices start from £6,995, but we’d recommend spending £11,245 for the Easy trim level and excellent 0.9 TwinAir petrol engine.

While you won’t get anything close to the claimed economy figures, the 99gkm CO2 means you’ll pay nothing in car tax. For now…

Volkswagen Polo Match Edition 1.4 TDI: 97g/km10 great value low emissions cars to buy NOW

Ordinarily, we’d recommend the SEAT Ibiza and Skoda Fabia as cost-effective alternatives to the Volkswagen Polo, but in the case of the new Match Edition we’re prepared to make an exception. In terms of kit, Volkswagen is chucking the proverbial kitchen sink at this special edition.

Tick the box marked ‘1.4 TDI BlueMotion’ and you’ll pay nothing in road tax. Just be sure you register the car before the end of March to avoid being out of pocket. Remember, the new tax rules apply to cars registered on or after April 1, 2017.

Tesla Model S: 0g/km10 great value low emissions cars to buy NOW

With prices starting from £55,000, we’d hesitate before classing the Tesla Model S as ‘great value’, but it remains a truly outstanding electric car. We’re including it in our round-up of cars to bag before April, because it’s a victim of the new ‘premium’ tax, which applies to all cars above £40,000.

While it’s tax exempt in year one, from the second year you’ll pay a £310 annual supplement for five years. Total cost: £1,550. Our advice: make sure you register your new Tesla before April.

Car tax 2017: buy now or after April?

Car tax 2017: buy now or after April?

Car tax 2017: buy now or after April?Vehicle Excise Duty (VED) changes, set to be introduced at the beginning of April, will mean that running a car will be more expensive for the majority of motorists.

With this in mind, we’ve selected two cars for each tax band and calculated how much you’ll pay in car tax before and after the changes. Spoiler alert: you’re probably going to be out of pocket unless you register a new car before 31 March 2017.

0g/km: Renault ZoeCar tax 2017: buy now or after April?

Three years (before/after): £0/£0
Five years (before/after): £0/£0

There’s good news if you’re thinking of buying an electric car in 2017: it will remain tax exempt. Which means you’re free to buy a Renault Zoe before or after the introduction of the new VED changes. However, the same rule doesn’t apply to all electric vehicles…

0g/km: Tesla Model SCar tax 2017: buy now or after April?

Three years (before/after): £0/£620
Five years (before/after): £0/ £1,240

If a car’s list price is over £40,000 at first registration, it will be subject to a new £310 surcharge for five years after the end of the first licence. So while the Tesla Model S is tax exempt in the first year, you’ll be out of pocket to the tune of £620 after three years, or £1,240 after five years.

1-50g/km: Volkswagen Golf GTE (39g/km)Car tax 2017: buy now or after April?

Three years (before/after): £0/£290
Five years (before/after): £0/£570

The new rules mean that, while a Volkswagen Golf GTE emits a full 39g/km more than a Tesla Model S, it’s actually cheaper to tax, at least in the short-term. That’s the good news. The bad news is that it’s no longer tax exempt. Indeed, you’ll pay £570 over five years.

51-75g/km: Toyota Prius (70g/km)Car tax 2017: buy now or after April?

Three years (before/after): £0/£305
Five years (before/after): £0/£585

You’ll soon discover that low emissions cars are the worst affected by the changes. The penguin-loving Toyota Prius might be one the greenest cars you can buy, but it’s subject to a £25 ‘showroom tax’, along with a £140 standard rate from year two.

76-90g/km: Mercedes-Benz GLE 500e (78g/km)Car tax 2017: buy now or after April?

Three years (before/after): £0/£1,000
Five years (before/after): £0/£1,900

The carrot of free car tax makes the Mercedes-Benz GLE 500e plug-in hybrid a tempting proposition, but all that is set to change. The combination of the ‘premium’ surcharge and £100 ‘showroom tax’ means that you’ll be £1,000 worse off in just three years.

91-100g/km: Nissan Qashqai 1.5 dCi (99g/km)Car tax 2017: buy now or after April?

Three years (before/after): £0/£400
Five years (before/after): £0/£680

We’d say the same about the nation’s favourite crossover, which, when powered by the popular 1.5 dCi diesel engine, is £400 more expensive to run in the first three years.

101-110g/km: Vauxhall Viva (104g/km)Car tax 2017: buy now or after April?

Three years (before/after): £40/£420
Five years (before/after): £80/£700

You buy a car like the Vauxhall Viva to save money. And, sure enough, with prices starting from £129 per month, it’s a frugal way of getting from A to B. All of which means the three-year tax increase might be a little hard to stomach. The tax man will be asking for an additional £380 over three years.

111-130g/km: Lexus RC 300h Premier (116g/km)Car tax 2017: buy now or after April?

Three years (before/after): £60/£1,060
Five years (before/after): £120/£1,960

Buy a Lexus RC 300h Premier in March 2017 and you’ll pay a token £60 in car tax over three years. Buy the same car in April and you’ll need to find an additional £1,000. Ouch.

131-150g/km: Ford Fiesta ST (138g/km)Car tax 2017: buy now or after April?

Three years (before/after): £390/£480
Five years (before/after): £520/£760

There’s a new Ford Fiesta waiting in the wings, which means you’ll need to be quick if you fancy a slice of Britain’s best hot hatch. But don’t worry if you can’t beat the 31 March deadline: the rate of increase is a modest £90 over three years.

151-170g/km: Subaru BRZ (164g/km)Car tax 2017: buy now or after April?

Three years (before/after): £555/£780
Five years (before/after): £925/£1,060

The Subaru BRZ, along with its cousin, the Toyota GT86, is a car you buy with your heart and not your head. With the VED front loaded, it makes sense to buy a BRZ after the rate change, that’s if you intend to keep your weekend toy for seven years plus.

171-190g/km : Vauxhall Corsa VXR (174g/km)Car tax 2017: buy now or after April?

Three years (before/after): £720/£1,080
Five years (before/after): £1,140/£1,360

Bad news for Corsa VXR buyers: the first-year rate skyrockets from £300 to £800, making it a more expensive in the showroom. Meanwhile, the standard rate drops from £210 to £140, making it more cost effective in the long term.

191-225g/km: BMW M3 (194g/km)Car tax 2017: buy now or after April?

Three years (before/after): £1,040/£2,100
Five years (before/after): £1,580/£3,000

The rate of tax will almost double for BMW M3 owners, so you really ought to place an order before the end of March. Remember, the ‘premium’ tax kicks in at the end of the first year and expires at the end of the fifth payment, at which point it drops to £140.

226-255g/km: Nissan 370Z (248g/km)Car tax 2017: buy now or after April?

Three years (before/after): £1,885/£1,980
Five years (before/after): £2,885/£2,260

Finally, some good news! If you register a Nissan 370Z after 1 April 2017 and intend to keep it for more than three years, you’ll be quids in. That’s because the annual rate drops from £500 to £140, although the £1,700 ‘showroom tax’ might hurt a little.

Over 255g/km: Ford Mustang 5.0 V8 (299g/km)Car tax 2017: buy now or after April?

Three years (before/after): £2,150/£2,280
Five years (before/after): £3,180/£2,560

Ford Mustang 5.0 V8 buyers: wait! Order a car today and you’ll pay £3,180 over the course of five years. Wait until April and you’ll save a hefty £620. You can spend that on premium unleaded.

Road tax 2017: how much more will Britain’s best-selling cars cost?

Road tax 2017: how much more will Britain’s best-selling cars cost?

Road tax 2017: how much more will Britain’s best-selling cars cost?From 1 April 2017, Vehicle Excise Duty – commonly known as road tax – is set for some major changes. If you’re looking to buy a new car in 2017, you really need to know about these and how they might affect you.

The headlines are: road tax will only be free for vehicles with zero emissions, there’s a new flat rate of £140 for the majority of cars from year two, along with a new £310 surcharge for cars costing more than £40,000. Here, we take a look at Britain’s best-selling cars to see how they’ll be affected by the changes. In all cases we’ve selected a popular engine for the comparisons and looked at the total cost over three years.

Peugeot 208 1.6 BlueHDi 75 Stop & Start: 79g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £0 over three years
From April 2017: £380 over three years

The Peugeot 208 was the 20th best-selling car of 2016, so there’s a fair chance it’ll be quite popular in 2017, too. Buy one with a 1.6-litre BlueHDi 75 Stop & Start engine on 31 March and you’ll pay nothing for the road tax. Buy one a day later and you’ll have forked out £380 in the first three years. Ouch.

Toyota Yaris Hybrid: 75g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £0 over three years
From April 2017: £305 over three years

You’d be forgiven for thinking that a hybrid supermini emitting just 75g/km CO2 would escape a hammering in the changes. But you’d be wrong, because the frugal Toyota Yaris Hybrid will be subject to a ‘showroom tax’ of £25 in the first year, followed by £140 for each year thereafter. Right now, the same car is tax exempt… for life.

BMW 1 Series 120d manual: 114g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £60 over three years
From April 2017: £440 over three years

Using the current rates, all sub 130g/km CO2 cars are free of road tax, or Vehicle Excise Duty (VED), to use its official name. From April 2017, only zero emissions cars costing less than £40,000 will be tax exempt. Thinking of buying a BMW 120d this year? You might want to place your order now.

Vauxhall Mokka X 1.4-litre Turbo: 140g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £390 over three years
From April 2017: £480 over three years

Although it’s not an exact science, the most efficient petrol, diesel and hybrid vehicles tend to be the hardest hit by the new rules. Buy something less efficient, such as a Mokka X with a 1.4-litre Turbo and the hammering isn’t quite so severe. The first year rate is up £70, but there’s a mere £5 penalty for each subsequent year.

Fiat 500 1.2-litre 69hp Eco: 99g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £0 over three years
From April 2017: £400 over three years

Anyone considering a Fiat 500 with the super-efficient 1.2-litre Eco engine really ought to place an order before the end of March. Rather than slotting into the cheapest VED band A, it moves up to the fifth tier, resulting in a £120 first year rate, before moving to the £140 flat rate.

Ford Kuga 2.0-litre TDCi: 122g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £220 over three years
From April 2017: £440 over three years

Buy a Ford Kuga with a 2.0-litre TDCi today and you’ll pay no tax in the first year, before paying £110 from year two. From 1 April 2017, the three-year cost doubles, thanks, in part, to the £160 ‘showroom tax’.

BMW 3 Series 320i manual: 128g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £220 over three years
From April 2017: £440 over three years

It’s a similar story for the BMW 320i, which is currently tax exempt in year one. We’d recommend buying an efficient petrol or diesel car before the end of March, but the issue isn’t as clear cut for gas guzzlers. In the least efficient ‘over 255g/km’ band, the ‘showroom tax’ goes up from £1,120 to £2,000, while the annual rate drops from £515 to £140. If you intend to keep a car for the long-term, it might be better to wait until April.

Nissan Juke 1.2 DIG-T 115: 128g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £220 over three years
From April 2017: £440 over three years

The Nissan Juke 1.2 DIG-T 115 emits the same CO2 as the BMW 320i, meaning the rate of tax is exactly the same. However, under the new system, all cars above £40,000 will be subject to a £310 annual supplement for five years. This includes electric vehicles, meaning the Tesla Model S will no longer be tax exempt.

Kia Sportage 1.7-litre CRDI: 119g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £60 over three years
From April 2017: £440 over three years

Currently, the Kia Sportage 1.7-litre CRDI sits in a band lower than the Nissan Juke 1.2 DIG-T 115, but from April 2017 they’ll be grouped in the same seventh tier. So while the three-year rate is the same, the jump is more severe in the Sportage.

Mercedes-Benz A-Class 200d: 111g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £60 over three years
From April 2017: £440 over three years

The increase is the same if you buy a Mercedes-Benz A-Class with the excellent 200d engine and fitted with 17 or 18-inch alloy wheels. Opt for the 16-inch wheels and the CO2 drops to 106g/km, saving you £20 in the first year. Meanwhile, the 180d emits just 89/gkm when riding on 16-inch rims, saving a further £40.

Audi A3 1.4-litre TFSI: 105g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £40 over three years
From April 2017: £420 over three years

Audi’s 1.4-litre TFSI engine is an excellent unit, but come April, it will no longer be a brilliant tax dodger. The annual rate increases from £20 to £140, while the ‘showroom tax’ is up from zero to £140.

Mercedes-Benz C-Class 220d manual: 103g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £40 over three years
From April 2017: £420 over three years

You’ll experience a similar hike if you buy a Mercedes-Benz C 220d with a manual gearbox. It’s worth pointing out that an increase of £20 or £40 in the first year isn’t likely to make a new car any less attractive. No, the real difference comes in year two, especially with cars that are moving from zero tax to the £140 flat rate.

MINI Cooper 1.5 petrol: 105g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £40 over three years
From April 2017: £420 over three years

MINI’s excellent 1.5-litre three-cylinder petrol engine is rather special. It also happens to be free of road tax in the first year and subject to a £20 fee from the second year. You’ll have to dig a little deeper from April 2017.

Volkswagen Polo 1.2 TSI: 128g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £220 over three years
From April 2017: £440 over three years

Over three years, the rate of taxation for a Volkswagen Polo 1.2 TSI will double. We’d suggest buying one before the end of March.

Vauxhall Astra 1.4 Turbo: 124g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £220 over three years
From April 2017: £440 over three years

We like the 1.4 Turbo engine in the new Vauxhall Astra, but it’s less attractive under the new tax rules. Of course, you might think the 82g/km CO2 1.6-litre CDTi would be a cheaper option, but in reality you’re only saving £60 in year one. From the second year, the rate is exactly the same.

Nissan Qashqai 1.5 dCi: 99g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £0 over three years
From April 2017: £400 over three years

Ouch. You’re in for a shock if you’re buying Britain’s favourite crossover. Choose a Nissan Qashqai powered by the popular 1.5-litre dCi engine and you’ll be £400 out of pocket over three years. It’s worth remembering that the changes don’t affect any cars registered on or before 31 March 2017.

Volkswagen Golf 2.0 TDi BlueMotion: 106g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £40 over three years
From April 2017: £420 over three years

The only winners are buyers of electric and hydrogen vehicles costing less than £40,000, along with those buying a car with a big engine and intent on keeping it for many years. Choosing an efficient car such as a Golf BlueMotion and you’re likely to be out of pocket.

Ford Focus 1.0 EcoBoost: 108g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £40 over three years
From April 2017: £420 over three years

Many cars powered by 1.0-litre turbocharged petrol engines come in for criticism for their real-world fuel economy, but at least the cheap road tax is something you can rely on. Not from April 2017 you can’t…

Vauxhall Corsa 1.0 Turbo ecoFLEX: 115g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £60 over three years
From April 2017: £440 over three years

Industry experts are predicting a bumper March, as buyers rush to beat the tax changes and grab a new 17-plate car in the process. You can expect many Vauxhall Corsas to be registered in March…

Ford Fiesta 1.25: 122g/km CO2Road tax 2017: how much more will Britain’s best-selling cars cost?

Pre-April 2017: £220 over three years
From April 2017: £440 over three years

Along with one or two Ford Fiestas. Our advice: if you’re seriously thinking of buying a new car in 2017, it’d pay to check how much you could save by registering it before the end of March. A few hundred quid in your back pocket is not to be sneezed at. For the new tax rates, take a look at our five-minute guide.

changes to road tax 2017

New 2017 road tax rules: a five-minute guide

changes to road tax 2017

From 1 April 2017, Vehicle Excise Duty – commonly known as road tax – is set for some major changes. If you’re looking to buy a new car in 2017, you really need to know about these and how they might affect you.

First things first – if you own a car registered before 1 April 2017, the changes don’t affect you. But if you’re in the market for something new, you have until the end of March 2017 if you don’t want to be stung by the reforms.

And that’s because, while there’s good news for some, the majority of drivers could be left out of pocket. Read on to find out more.

Why is the system changing?

Cast your mind back to the budget of summer 2015, when the Chancellor of the Exchequer announced an overhaul of the current system. According to then Chancellor, George Osborne, the changes are required to fill a hole in the Treasury’s coffers.

In simple terms, you’re buying too many super-efficient petrol and diesel cars, and with a taxation system based on CO2 emissions, the government has been left out of pocket. Indeed, Osborne claimed that, under the current system, 75% of new cars would be eligible for free road tax by 2017.

Something had to give.

What are the changes to road tax?

The rate of Vehicle Excise Duty (VED) will still be split into 13 bands and calculated on a vehicle’s CO2 emissions. Only cars with 0g/km CO2 emissions will be eligible for free road tax. This is a big deal.

Since March 2001, new cars emitting less than 130g/km CO2 have been tax exempt in the first year, and subject to a sliding scale of taxation for each year thereafter. For example, buy a car in band B (101-110g/km) and you’ll pay nothing in the first year and just £20 from year two.

From April 2017, the cost will rise considerably. Not only will you pay £140 in the first year, you’ll also pay £140 in the second year and each year thereafter. So at the end of year three you’ll have spent £420 on tax – £380 more than if you bought the same car a month earlier.

The first-year rate of tax is based on a sliding scale, ranging from free road tax for electric and hybrid vehicles, to £2,000 for cars with CO2 emissions in excess of 255g/km. From the second year, all but the zero emissions cars move to flat rate of £140.

This is potentially good news for buyers of the least efficient cars on sale. Take the Bentley Flying Spur with a V12 engine. With CO2 emissions of 335g/km, under the current system you’ll pay £1,120 in the first year and then a hefty £515 from the second year.

Using the new system you’ll have to find £2,000 for the first year, but the second year rate drops to the standard £140. Keep the car for a few years and you’ll be quids in. But there is a catch…

From April, all vehicles with a list price of over £40,000 – including zero emission cars – will attract an additional rate of £310, payable each year for five years from the end of the first vehicle licence. At this point it drops to the standard rate.

Which means a Tesla Model S will cost £310 a year – a big shock for those who might be expecting free road tax.

Is it worth buying a car before April?

If you’re in the market for an efficient petrol, diesel or hybrid vehicle, it’s almost certainly worth registering it before the end of March. Indeed, industry experts are expecting one of the busiest months on record, as buyers also rush to grab a car with a new 17-plate.

Say, for example, you buy a new Suzuki Celerio with a 1.0-litre engine emitting 99g/km CO2. Register the car before the end of March and you’ll pay no road tax whatsoever. From April, you’ll pay £120 in year one and then £140 from year two. Three years on and you’re £400 out of pocket.

The case isn’t quite as clear cut when it comes to the least efficient vehicles, and much will depend on how long you intend to keep the car. There’s also the penalty for £40,000 cars to take into consideration.

Oh, and don’t think you’ll be able to escape the £310 fee by negotiating the price down below £40,000. The government will use the published list price. Go easy on the options, too, as these could push your car beyond the £40k mark.

Do the changes affect my current car?

Tax rates for vehicles registered on or before 31 March 2017 will not be affected by the changes.

VED bands and rates for cars first registered on or after 1 April 2017

CO2 emissions (g/km)First year rateStandard 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£1200£140
226 – 255£1700£140
Over 255£2000£140

*Cars with a list price of over £40,000 when new pay an additional rate of £310 per year on top of the standard rate, for five years.

Car tax disc

DVLA loses £93 million after paper tax disc scrapped

Car tax discThe DVLA has revealed revenue from vehicle excise duty fell by £93 million in the year following the scrapping of the paper tax disc – significantly more even than the DVLA’s predicted VED loss.

The DVLA’s accounts show vehicle tax revenue fell from £6.023 billion in the 2014/15 financial year to £5.930 billion in 2015/16.

The RAC, which warned the DVLA about the loss in income, is now concerned the shortfall is even greater than the DVLA itself predicted. It also cites 2015 DVLA projections that revealed there could be 560,000 unlicensed vehicles on British roads – compared to around 210,000 in 2013.

The DVLA admitted in November 2015 that the number of unlicensed cars on British roads had doubled since the new paperless tax disc system was introduced.

RAC spokesman Simon Williams said: “Some may argue that a £93 million loss is only £13 million higher than expected, but this still represents an increase of £58 million on the corresponding period before the tax disc was abandoned and far exceeds the £10 million savings arising from no longer issuing tax discs.

“This loss is a significant sum and one that merits further investigation.”

The motoring organisation concedes it might be because there are more low CO2 cars on the road, but is still calling for another roadside survey of unlicensed vehicles this summer, a year earlier than it normally would occur.

“We just hope that this doesn’t prove to be the tip of the iceberg and that the figure does not keep on rising, especially as the DVLA had predicted the new system would lead to savings of £10 million.”

VED road tax

Road tax reforms could cost country £167m

VED road taxFrom 1 October 2014, the paper tax disc will disappear, replaced by online records – and this could have serious implications for government finances, warns the RAC. Read more

Sorry officer, a snail ate my tax disc

Chevrolet Turbo Snail

Faced with the prospect of a £100 fine for failing to display a valid tax disc, you could forgive a motorist for conjuring up excuses.

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