£450 Road tax on cars listed at over £40,000 when new

[davm666]

The first year is done on pure emissions. So the +255g pay £2000.

It's all a shambles.

 

[davidjpowell]

Going by the tables I have seen there are three categories : 'zero' , 'standard' and 'premium' .

Separately from the emissions based levy in year one , cars falling into the zero category pay nothing in subsequent years , save for the £310 surcharge if they cost over £40K , 'standard' cars pay £140 plus the surcharge , makng £450 in years 2 to 5 and £140 thereafter , and 'premium' cars will pay an undisclosed sum from years 2 onwards , plus the surcharge . All cars listed in the published tables are either zero or standard rated , nothing else has been quoted .

Budget 2015: Vehicle Excise Duty reform for new cars - BBC News

The £310 surcharge is the premium option....

 

[st13phil]

I thought it was years 1-5, as that was the whole point of it that new car buyers pay in the first year?

According to the text in the pdf linked from post #39:

...a supplement of £310 will be applied to the SR of cars with a list price (not including VED) over £40,000, for the first five years in which a SR is paid.

As Standard Rate (SR) is not paid in year 1, that means the supplement is paid in years 2 thru 6 inclusive.

There may be some arguable logic that those who can afford to pay a substantial sum for a new car can afford to pay more duty and therefore should. However, most who purchase a high-value car new keep it for 3 years or less, so the policy will disadvantage people who wish to buy what was a high-value car on the used market that has depreciated significantly. Typically, a £40k at list price car will retail for something around £16k - £18k at 3 years old. A new car in that price bracket would not attract the VED supplement, yet the used "premium" car would - for four more years. This looks to be a gross distortion and its hard to imagine that it won't hit residuals meaning that the first owner will get hit twice: once for additional VED, and again by additional depreciation. Looks more like a policy of envy to me.

Having said all that, it's a bit of a "first world problem" when you see the effect the changes to in-work benefits will have on the poorest members of society

 

[Giantvanman]

According to the text in the pdf linked from post #39:As Standard Rate (SR) is not paid in year 1, that means the supplement is paid in years 2 thru 6 inclusive.

There may be some arguable logic that those who can afford to pay a substantial sum for a new car can afford to pay more duty and therefore should. However, most who purchase a high-value car new keep it for 3 years or less, so the policy will disadvantage people who wish to buy what was a high-value car on the used market that has depreciated significantly. Typically, a £40k at list price car will retail for something around £16k - £18k at 3 years old. A new car in that price bracket would not attract the VED supplement, yet the used "premium" car would - for four more years. This looks to be a gross distortion and its hard to imagine that it won't hit residuals meaning that the first owner will get hit twice: once for additional VED, and again by additional depreciation. Looks more like a policy of envy to me.

Having said all that, it's a bit of a "first world problem" when you see the effect the changes to in-work benefits will have on the poorest members of society

That.

 

[tec]

Having said all that, it's a bit of a "first world problem" when you see the effect the changes to in-work benefits will have on the poorest members of society

No change at all to low paid according to BBC calculator, at least that's what I tried for a single person middle aged.

 

[trapperjohn]

Being a guy of simple means and brains.

Say I were to buy a motor now and the first years was free and its currently, say, 30 squid a year after that (now) does that price go up to £140 instead of £30 this time next year?

And could I just add to that will my 21 year old 124 now go down to 140 a year instead of around 260.

 

[renault12ts]

There will be no change in the tax people pay for their present cars.

 

[trapperjohn]

I thank you Sir.

 

[smillion]

British motor industry; Range Rover, Jaguar, Aston Martin, Rolls Royce, Bentley, etc. the new VED is like sticking one up what seems to be one of our few remaining manufacturing successes .....

 

[geraldrobins]

British motor industry; Range Rover, Jaguar, Aston Martin, Rolls Royce, Bentley, etc. the new VED is like sticking one up what seems to be one of our few remaining manufacturing successes .....

I don't think this will stop people buying new cars and something has to give to compensate for the increase in the higher rate tax threshold.

 

[davidjpowell]

I don't think this will stop people buying new cars and something has to give to compensate for the increase in the higher rate tax threshold.

In any case a lot of these people might be paid in dividends - where they've been far harsher.

 

[MBDevotee]

British motor industry; Range Rover, Jaguar, Aston Martin, Rolls Royce, Bentley, etc. the new VED is like sticking one up what seems to be one of our few remaining manufacturing successes .....

C'mon....

New Aston DB9 £120,000 - current best leasing deal £2000 per MONTH.....

Do you really think £40 a month will persuade that buyer he should get a Focus instead??

There will be NO impact at all on the cars you mention.

The impact will be on cars from £35000 to £45,000

Then, there will be a real incentive for the LIST price to be lowered to just below the £40k threshold...

 

[219]

British motor industry; Range Rover, Jaguar, Aston Martin, Rolls Royce, Bentley, etc. the new VED is like sticking one up what seems to be one of our few remaining manufacturing successes .....

I imagine most production is exported , and unaffected .

 

[smillion]

C'mon....

New Aston DB9 £120,000 - current best leasing deal £2000 per MONTH.....

Do you really think £40 a month will persuade that buyer he should get a Focus instead??

There will be NO impact at all on the cars you mention.

The impact will be on cars from £35000 to £45,000

Then, there will be a real incentive for the LIST price to be lowered to just below the £40k threshold...

I am sure you are right.

And if any of my clients told me they had cancelled their Range Rover for a Focus I would be very surprised.

The fact remains that the current company car regime taxes the cars made by UK plc out of sight.

A new Range Rover Sport supercharged attracts a benefit in kind charge of £37,000, with tax at 40% being over £1,150 per month. IN TAX !

On top of that the employer has to pay £4,000 in employers national insurance.

My clients invariably have to satisfy running the cars privately. But just as likely, not to bother and not to buy.

The latest road tax is just another kick in the sweets for those that are considered a soft target and can afford to pay.

And then an increase in tax on dividends.

Forget Starbucks and Amazon and Google. Let's just get entrepreneurial UK SME's pay.

I stand by what I say. The government are just getting another buck out of our motor industry.

You reap what you sow.

 

[uumode]

So a person buying a second hand 1 year+ 3 litre V12 only pays £140 a year tax?

What's wrong with the old argument of putting the VED into the fuel duty so the heavy users of the road (and cars that consume the fuel at a faster rate) pay for it at the pumps? Electric cars don't pay as they don't visit the pumps.

 

[Bonecho]

http://www.honestjohn.co.uk/topten/top-20-cars-hit-hardest-by-the-2017-ved-changes/

Mercedes-Benz C300 BlueTec Hybrid AMG Auto Premium (£41,330)
CO2: 99g/km
Six-year VED total at 2015 rate: £0
Six-year VED total at 2017 rate: £2370
Penalty: £2370
The final part in the Mercedes-Benz hybrid horror trilogy, the C300 Hybrid is the only one that slips below today’s VED-free threshold, and therefore will command the biggest penalty come 2017. Already a very expensive C-Class with this drivetrain, in a couple of years’ time it will become almost pointless.

 

[Dryce]

What's wrong with the old argument of putting the VED into the fuel duty so the heavy users of the road (and cars that consume the fuel at a faster rate) pay for it at the pumps? Electric cars don't pay as they don't visit the pumps.

Which is sensible - and would get rid of a chunk of the DVLA.

However my feeling is that a VED based on the weight of the vehicle might be more creative and encourage manufacturers to look at new vehicle designs that were lighter without impacting on safety.

 

[grober]

British ???? motor industry; Range Rover, Jaguar, Aston Martin, Rolls Royce, Bentley,
RANGE ROVER-- Tata-Indian multinational
JAGUAR----------Tata Indian multinational
ASTON MARTIN-Investment Dar / Mahindra Mahindra / Investmentindustrial/who-knows ?
ROLLS ROYCE---BMW German
BENTLEY----------VW AG German

 

[smillion]

British ???? motor industry; Range Rover, Jaguar, Aston Martin, Rolls Royce, Bentley,
RANGE ROVER-- Tata-Indian multinational
JAGUAR----------Tata Indian multinational
ASTON MARTIN-Investment Dar / Mahindra Mahindra / Investmentindustrial/who-knows ?
ROLLS ROYCE---BMW German
BENTLEY----------VW AG German

I'm sure all British employees and suppliers take this view too .......