.header__wrapper { opacity: 1; }[Skip to content]
Areas we cover

Why Your Car Tax Has Increased

Posted in General

Has your car tax gone up?  If you’ve gone to tax your car and you’ve noticed an increase, then take comfort that you’re not alone!  Of course, if you don’t want to pay more tax – then why not tell yourself to “Scrap my car in Herts” or “Scrap my van in Essex” and join thousands of others refusing to pay more car tax!

As of 1st April this year, car tax (otherwise known as Vehicle Excise Duty) has gone up.  UKCarMovement, the number one car scrapping service in North London, Hertfordshire and Essex will debunk the reasons why – because while no one likes to pay more, there are actually some good eco-friendly reasons why your car tax has increased. 

Your Vehicle’s Emissions

As you probably know, emissions, sustainability and environmental issues are still very big news – perhaps more so, with a pandemic still raging across the world.  It’s everyone’s responsibility to try and reduce their carbon footprint so the planet survives for future generations.  Your petrol or diesel vehicle emits carbon dioxide and that’s harming the environment, it’s a pollutant, its fumes are dangerous, and the government is taking great strides to try to reduce the amount of CO2 in the atmosphere.  With electric cars growing in popularity and almost every car manufacturer making their version of an electric or hybrid vehicle, one day we will likely see hardly any petrol cars on the road (with no diesel cars).  If you’re interested in how electric cars are scrapped, click here to read our blog on it.  Back to CO2 emissions.  The road tax relates to your car’s emissions.  The greater your emissions, the more road tax you’ll pay.  However, these new road tax rules won’t apply to older cars (they will carry on using the old car tax rules).

Going Electric

If you have an electric car, it won’t emit carbon dioxide – the good news here is that means you won’t pay road tax at all.  So, if you’re considering scrapping a diesel or petrol car in Hertfordshire, North London, or Essex, use UKCarMovement for the best quote and put your money towards a brand-new electric car.  You’ll be kinder to the environment, and you’ll have some extra cash in your pocket to help pay for a new car.

Luxury Cars & Hybrid

Now, electric cars are one thing but if you’re buying a state-of-the-art electric car that costs more than £40,000 – well, we have some more good news for you.   Your luxury electric car means that you won’t have to pay any extra cash that high-value cars usually attract during years 2 to 6 of ownership.  That could save you almost £2,000.00.  Of course, not many people can afford a luxury car let alone an electric luxury car so then you’ll pay your tax for your first year of ownership and then that rate will shift up by £5 (petrol and diesel cars) to £155.  For hybrid cars and alternative fuel vehicles, it’s a little less at £145.00 per annum.

First Year Rates of Tax

Let’s talk about those “first year” rates of tax. The more CO2 your car emits, the more that rate will go up.  There are categories that apply to the rates set out for car tax.  For any new car bought that emits carbon dioxide, there will be a charge applied. 

  • Vehicles emitting 1g to 50g of carbon dioxide per kilometre won’t pay a rate increase.  The charge will remain at £10.00
  • Vehicles emitting 51g to 75g of carbon dioxide per kilometre will be charged the same amount as before, £25.00
  • Vehicles emitting 76g to 170g of carbon dioxide per kilometre will have an extra charge of £5 taking the charge to £115
  • Vehicles emitting 171g to 190g of carbon dioxide per kilometre will have an extra charge of £25 to £895
  • Vehicles emitting 191g to 225g of carbon dioxide per kilometre will have an extra charge of £30 to £1,345
  • Vehicles emitting 226g to 255g of carbon dioxide per kilometre will have an extra charge of £50 to £1,910
  • Vehicles emitting 255g+ of carbon dioxide per kilometre will have an extra charge of £70 to £2,245

New diesel cars registered after 1 April 2018 that did not comply with RDE2 emission testing are to be subject to a much higher tax rate during their first year of ownership.  The amount could be four times more than their equivalent petrol or hybrid vehicles. 

Premium Cars

Premium cars have another set of rules.  These cars come in the £40,000 bracket when purchased as new.  Their rate has moved up £15 a year from £320 to £335 annually, for the first five years of ownership.  There is an exception though, for zero-emission vehicles.  So, if you have already purchased a premium car that’s zero emissions, you will avoid this fee.

What about Fuel?

Fuel tax is not increasing.  It’s still 57.95 per litre, that’s another freeze this year. 

Company Cars – Benefit in Kind

Sometimes referred to as BIK – Benefits in Kind usually relates to a taxable work perk such as a company car.  This tax was scrapped a year ago and has come back into play, again.  BIK will be 1% based on vehicle value and income (zero emission cars and vehicles are still subject to the BIK tax).   While no one wants to pay more, in 2019, Benefit in Kind rates were as much as 16%!  

Future Purchase Tax

One additional point that’s worth bearing in mind if you’re planning to buy a car in the future is something called Future Purchase Tax.  This has not yet been introduced but it might do if pollution levels don’t fall.  The idea behind the Future Purchase Tax is for those buying cars with more than 225g of CO2 per kilometre.  The car’s tax would be 50% more and would continue to increase annually.  The aim here is to discourage car buyers from purchasing cars with high CO2 emissions and encourage them to buy hybrid or electric cars instead.

If you’re looking to scrap your car in Essex (Herts or North London too), using UKCarMovement guarantees you peace of mind.  We own our own car scrap yard in Herts, which means there is no middleman.   The competitive price we quote you is what you get – and we offer a FREE collection and delivery service anywhere in North London, Hertfordshire and Essex.  We also guarantee your money into your bank account on the same day as we scrap your car in North London plus we’ll issue you with a Certificate of Destruction as proof that you sold your car for scrap.

Click here to find out what you could get for your scrap car in Hertfordshire, Essex or North London.

You can find out more by calculating your tax rate for your vehicle by clicking here

Further reading