Changes to road tax will punish owners of green cars who help reduce pollution when new rules come into place in 2017.

The new road tax rules, which are set be introduced from April 2017, will see any newly registered car that emits 1g/km of CO2 will cost its owner a flat rate of £140 a year for the first six years.

This means that owners of new cars that emit less than 101g/km CO2 will no longer benefit from not having to spend on Vehicle Excise Duty, instead they could pay up to £820 alongside fuel and insurance costs.

By 2023, it is estimated that the new Vehicle Excise Duty rules will generate around £5.15 billion of revenue for HM Treasury. It's also estimated that around £4.69bn of that will come from cars that emit 1-130g/km of CO2, despite these currently costing nothing in the first year.

Cars that produce a lot more pollution will also be punished by having to pay £500 a year in road tax, however when the new rules come into action it is reported that the driver will be £925 better off over six years if the car's list price is less than £40K.

This is because cars with a list price in excess of £40,000 are also subjected to an annual charge of £310 from year two to six.

Speaking of the upcoming rule change, Tim Pollard, Digital Editor-in-Chief of Parkers', which carried out the research, commented: "We recognise that the Government has to act to keep VED car tax up to date with cleaner engine technology, but some of the quirks of the new system uncovered by Parkers' investigation are distinctly unfair to Britain's motorists.

"We predict widespread confusion among car buyers; this time next year, the goalposts are moving dramatically and many people's tax bills will rise significantly."

Can you avoid the changes to road tax?

Motorists hoping to avoid these revised rules are being advised to lease their car. This is because car owners who acquire their car on contract hire can find themselves not having to worry about road tax costs as most leasing companies handle that additional cost.

To find out more about personal leasing or Personal Contract Hire (PCH) click here.

Get a GAP insurance quote for your new car

Share this post