New car tax bands are now in force and drivers could face a £4,850 road tax charge on certain vehicles – here’s everything you need to know about the new UK car tax rules confirmed by Rachel Reeves
(Image: Ian Forsyth, Getty Images)
Motorists are facing £4,850 car tax bills under new bands introduced by the Labour government. The updated Vehicle Excise Duty (VED) rates have come into effect this year, with the £4,850 charge applying to vehicles emitting between 226 and 255 g/km of CO2.
These rates apply to tax bands for cars registered after April 2017. The RAC explains that Vehicle Excise Duty (VED) – commonly referred to as car tax or road tax – is fundamentally a levy for using a vehicle on public roads throughout the UK.
It was brought in during 1937, replacing the previous road tax system, which can be traced back to the taxation of Hackney Carriages in the 17th century. The tax disc came into being in 1921, and until 1974, car taxation was administered by local authorities.
Labour Chancellor Rachel Reeves announced the rate increases in the Autumn Statement last November.
According to the RAC, the DVLA gathers approximately £5 billion annually in VED, though not all of these funds are directed towards road improvements and infrastructure, reports Birmingham Live.
VED is combined with other taxation types, which means revenue from your road tax is equally likely to fund education or healthcare as it is to support road maintenance.
It said: “DVLA consigned the tax disc to the history books, which means motorists are not required to display a paper disc in the windscreen.
“Instead, VED is handled by an electronic database, as the government continues to digitise public services.
“Today, the police and other law enforcement agencies use a network of Automatic Number Plate Recognition (ANPR) cameras. These cameras might be situated at the roadside, or located in a police vehicle.
“The ANPR system exchanges data with the DVLA database which keeps a record of all taxed and untaxed vehicles.”
It went on: “If you own a vehicle, you will automatically receive a reminder before the tax is due to expire, which is always at the end of a given month.
“In other words, if your vehicle is taxed for 12 months from 1 January, you’ll need to renew before the end of December.
“You can tax a car for six or 12 months. You’re also liable for road tax as soon as you take ownership of a car, although if you’re buying an efficient new vehicle, this might cost less than you think. In fact, buy wisely and you might pay nothing at all.”
