In the Autumn Budget, Chancellor Philip Hammond announced that all new diesel cars from 1 April 2018 will face going up a VED band if they fail to meet the latest Euro 6 standards under real-world testing.
New cars will have to meet the real driving emissions (RDE) step 2 test that forms part of the current EU type approval process. This means new cars can pollute up to 1.5 times the current 80mg/km NOx limit under real-world driving if they are to avoid going up a tax band.
The changes only apply to diesel cars, not vans, and do not impact the subsequent £140 yearly fees all cars have to pay after the first year. The table below shows how the new rates will work. Any car failing to meet the Euro 6 standards in real world testing would move up a band, and thus pay anything from £15 to £500 more in first year rates. Not to worry though, you’ll find that most diesel cars are all well within the Euro 6 standards.
The increase in road fund tax has a knock on effect to the price of the vehicle and so to the cost of leasing although you will not notice this as it will be absorbed into the monthly payments and road tax is included for the full period in a lease.
HOW IT IS ROAD TAX BEING CALCULATED?
The calculations are based on your car’s CO2 emissions, starting at £10 for those cars with between 0 – 50g/km figures. After the first year, you will have to pay £140 annually. This means that the only cars that will be completely free of road tax are the 100% electric cars.
We have a range of electric and hybrid lease car deals for you to consider.
VED car tax bands: April 2017 Onwards
|Emissions (g/CO2/km)||First year rate||Standard rate|
Cars above £40,000 pay £310 annual supplement for five years.