In the last Budget, the Chancellor outlined an overhaul of the Vehicle Excise Duty (VED), more commonly known as Road Tax.
Since March 2001, the amount of road tax you had to pay was banded and linked to the CO2 emissions of your vehicle – cars with emissions of less than 100 grams of carbon per kilometre were liable for no road tax. The 13 bandings were spread between zero and £515 per year, with lower emissions vehicles being significantly cheaper to tax than higher emission “gas guzzlers.”
The reasoning behind these bandings was to encourage us to drive cleaner vehicles – and it worked! This was supplemented by European legislation that targeted manufacturers on producing a model line-up with an average of 140g/km CO2 emissions.
There is no doubt that the combined result of these two actions is that overall CO2 emissions of cars on UK roads had reduced dramatically over recent years. Looking at our own model line up for example, the current price list contains 246 models and variants of th0se models, 82% of these have emissions of 140g/km or below (202 vehicles), with 37% of all our vehicles falling below the 100g/km CO2 threshold.
This is only half the story though – it is a representation of the vehicles we offer, not the vehicles we actually sell. Customer habits, driven by the outgoing road tax bandings, have seen us sell a higher proportion of smaller cars, with a large chunk of these being from our Hybrid range. At a conservative estimate, around 95% of the passenger car sales out of our three Toyota Centres are below the 140g/km CO2 threshold that forms the basis of European legislation.
The rules are changing from April 1st 2017. All passenger cars registered from this date will attract a first year tax that is based on emissions. This ranges from zero for the cleanest cars, right up to £2000 for high emissions vehicles. As with the current first year rates of zero to £1120 first year rates, this will be a part of the “On The Road” price advertised by motor manufacturers. The differences start in year two of the cars life. From this point petrol and diesel engine cars will be charged road tax at £140 per year, with alternative fuel vehicles (such as our Hybrid cars) attracting a slightly lower £130 per year rate. Purely electric-driven vehicles with zero emissions will continue to be rated at zero road tax.
On top of this there will be a supplement for five years of £310 per year on all vehicles with a list price of £40,000 or above – meaning that a zero-emissions electric vehicle with a £40,000+ list price will now be liable for £310 per year in road tax.
Rest assured though. Despite these changes and the taxation emphasis being moved away from the CO2 emissions of your car, Toyota will continue to develop ever-cleaner, more efficient cars. These vehicles will be developed and built in state of the art, greener facilities – such as our factory in Burnaston, Derbyshire which operates with zero waste-to-landfill and a huge reliance on renewable energy.