IN all the current fuss over Brexit and the Autumn Statement from Chancellor Philip Hammond, it’s surprising how quickly Mr George Osborne has faded from our memories.
One of George’s final acts as Chancellor was to change the Vehicle Excise duty rates effective from 1 April 2017.
The current road tax regime is costing the Government a packet as carmakers reduce the CO2 emissions of their cars to take advantage of the generous VED tax bands for lower-emissions vehicles as well as being driven by the BIK regime.
In fact, almost 25 per cent of new cars registered won’t pay any road tax at all as they fall into the VED Band A for cars with CO2 lower than 100. So the Government is losing a lot of tax take!
What is their solution? To change the bandings and charges but do it in order to make it “fairer’ for motorists with the emphasis on expensive cars, ensuring that those drivers who can afford an expensive car will pay more. However, all drivers are likely to be affected as the Government takes a sledgehammer solution to a small nut of a problem. So the new charges are in essence:
* The first year’s charge continues to be based on the CO2 emission but the bandings change
* From Year 2, a standard rate of £140 pa will apply to all cars except those with zero CO2 emissions
* If your car is “expensive’ and worth over £40,000 then an additional £310 per annum will apply
This means that in 2017 the leasing companies will start to factor these costs into their calculations for cars likely to be delivered after 1 April. If you are lucky enough to take delivery of an expensive car then there could be over £1,200 more road tax charges to be included in your rental, easily another £30 per month over three years.
Good old George! This is going to raise the government a lot of money. I’ve had a quick look through the small print but can’t find where it says they promise to spend it on better roads and filling potholes, but perhaps I didn’t look properly!
What can you do? I’m afraid nothing, other than get your new car order into us quickly and then get delivery, if possible, before 31 March. We have a full detailed pdf showing the impact that we can send you courtesy of our friends at Lex Autolease, just drop us an email to
Other than that have a happy and prosperous 2017 and if you have any car or van related enquiries then speak to one of the team at Alpha Contracts Leasing Limited on 01604 756620.
Safe motoring