Electric cars and Road tax
Electric car tax, we will explain it. Paying vehicle tax is the least enjoyable parts of driving a car. Vehicle Excise Duty (VED) is determined by the Department for Transport, and it screens all the cars.
Cars in the UK determine how much of tax you need to pay by calculating how much is throws emission into the air, especially carbon dioxide (CO2). The higher the emission is, the higher the bill is going to be. Department for Transport had a massive change in its taxation system, making the taxes higher for more polluting cars and harder to avoid tax for low pollution cars. Although here were some exceptions applied to hybrid and electric cars.
Vehicle tax rates
The vehicle tax rate (or car’s emission rate) is determined according to standard tests. Before Worldwide Harmonised Light Vehicle Test Procedure (WLTP), was introduced in September 2017, UK used New European Driving Cycle (NEDC) test. It is a laboratory test, but the newer standard is much more closer to real world driving conditions.
WLTP regime is used for all the new vehicles that take the emission test, but VED is still calculated by the legacy test NEDC.
Post 1 April 2017 registered vehicles tax.
A new set of rates were introduced by the government starting 1 April 2017. Old VED rates for 100g/km CO2 emission cars were not required to pay tax. New technologies developed in car industry made sure that many new cars were exempt from the VED as the emission levels were low. This was not a situation imagined by HM Treasury.
In order to for HM to get back to businesses, new set of rules were introduced. This meant having a first year fee and a flat-fee for subsequent years. Changed rates for the first year fee was based on the emission, and the other year fees were £140 regardless of the emissions.
As a result, this meant that only pure electric cars were exempt from tax. Hybrids and PHEVs are to pay based on the emission they emit.
What about tax rates for electric vehicles?
As pure electric cars which cost less then £40,000, this might not be the case in the near future. As the government loses more and more on the petrol duty, this might motivate more changes. £28 billion is made on the fuel sale.
There are multiple proposals made to change the vehicle taxation in the future. One is to charge vehicles based on the miles they run for, this is road charging. The money from this could be put on developing smarter roads which will facilitate better conditions for smart cars.
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