New goverment car tax rules from April 2017. Your thoughts?

motorguy

Mind you, all things considered, the Road Tax is still the least of your problems if you're spending more than £40K on a car.


Depreciation will be your biggest cost, followed by fuel.

tberry6686

It's only the fairest system if you live and work in a large town or city. Anyone else, it is a penalty for more remote living.

Personally I favour the scrapping of tax on road use at all and instead calculate the expected pollution caused by a vehicle over its entire lifespan (including manufacturing) and tax that instead at the point of buying the vehicle.

The green lobby and eco freaks would hate it as it would show electric cars to be far from environmentally friendly and make them amongst the highest taxed vehicles going.

Herzlos

motorguy wrote: »

When it was (roughly) based on engine size / pollutants people (rightly) gravitated towards lower or £0 tax vehicles. This cost the government a fortune in lost revenue.


Hence they've introduced this new system to get the revenue back.

Which still won't work as people will gravitate towards a sub £40k car.

Taxing it based on actually using fuel is unavoidable, unless you're using a plug-in hybrid.

Plus, isn't there a higher rate VAT / additional tax on new car sales anyway? I can't find it on google.

There's already at least a £6666 tax bill on that £40k purchase as-is (assuming it's only 20% VAT).

motorguy

tberry6686 wrote: »

It's only the fairest system if you live and work in a large town or city. Anyone else, it is a penalty for more remote living.

Personally I favour the scrapping of tax on road use at all and instead calculate the expected pollution caused by a vehicle over its entire lifespan (including manufacturing) and tax that instead at the point of buying the vehicle.

The green lobby and eco freaks would hate it as it would show electric cars to be far from environmentally friendly and make them amongst the highest taxed vehicles going.

Theres no "fairness" though - its about extracting more cash out of people and trying to put some justification around it.


They set the current tax system up to supposedly encourage people in to low emissions cars, never expecting there to be the mass move that there was to them. So then its like oh !!!! what do we do now for revenue? So they've moved the goal posts again.


Once people start gravitating towards cars under £40K list price, their revenue forecasts will be out the window again, so they'll have to move the goalposts again.


It does amaze me though how people fixate on road tax though - the amount of people you hear of who have bought a new car "because its £30 road tax" not realising they're going to lose 100x that in the first year easily, compared to keeping what they have.

motorguy

Herzlos wrote: »

Which still won't work as people will gravitate towards a sub £40k car.

Taxing it based on actually using fuel is unavoidable, unless you're using a plug-in hybrid.

Plus, isn't there a higher rate VAT / additional tax on new car sales anyway? I can't find it on google.

There's already at least a £6666 tax bill on that £40k purchase as-is (assuming it's only 20% VAT).

Correct!


So once their revenue forecasts aren't met because people will aim UNDER the £40K threshold, they'll move the goal posts again....

Herzlos

motorguy wrote: »

It does amaze me though how people fixate on road tax though - the amount of people you hear of who have bought a new car "because its £30 road tax" not realising they're going to lose 100x that in the first year easily, compared to keeping what they have.

This always gets me too. I mean, I chose an older model to drop from £495/year (2006+) to £295/year (2005) when I was buying, but I otherwise don't pay that much attention to it. Compared to the depreciation and what the car actually cost, the £25/month in tax was pretty much irrelevant.

Not that I mind that my tax is now £12/month, but that had more to do with justifying the purchase than any actual decision making criteria

AdrianC

dannyrst wrote: »

Tax should be done on miles driven not emissions or value of the car.

Most of it already is. Don't forget - vehicle taxation is a two-step process.

Step 1 is a fixed cost - VED - which is £0 for vehicles over 40yo, based on engine size for 40yo-2001 cars, CO2 for 2001-on cars. 2017-on is still CO2-based, but in different bands.
Then there's been a one-off cost for new cars, again CO2-based, since 2013.
From 2017, there'll be a list-price based cost for the first five years.

Step 2 is a variable cost, depending entirely on fuel usage. This is, for most cars, the majority of a car's tax liability. There's 58p duty per litre, then there's VAT - at £1.15/litre, it's 19p VAT - so 77p total. If you do 10,000 miles a year at 40mpg, then you're using 1,125 litres, at a tax liability of £866.25.

Then, of course, there's whatever other VAT and IPT is paid for maintenance, insurance, breakdown cover, etc etc.

A rejig of the CO2 bands was needed - the amount of VED being taken was falling rapidly, as manufacturers gamed the testing to greater or lesser extents, with much lower average figures than were possible in 2001.

AdrianC

motorguy wrote: »

So once their revenue forecasts aren't met because people will aim UNDER the £40K threshold, they'll move the goal posts again....

Nah, people don't think about the list price - it's all about the monthly lease.

Richard53

Herzlos wrote: »

A tax that bears no resemblance to the size of the vehicle, or how/where/much it's driven seems nuts.

And of course the elderly Jag driven 500 miles a year pays far more in tax than a small rep car driven flat out for 50,000, even though the emissions will be a fraction of the newer car in total.

Put the VED equivalent on fuel so it is revenue-neutral (I think I've seen it estimated at 6-7p per litre, could be wrong) and massive polluters pay massively, low polluters pay less, and electric cars pay nothing - at least directly. And it puts an end to the 'cyclists don't pay road tax' debate. They wouldn't pay the tax because they don't need fuel, simple enough for anyone to understand.

Herzlos

It'd also save a fortune in administration and enforcement, and you'd avoid people getting caught out, double payments and so on.