Taxes will be taxing

From April 1, a new Vehicle Excise Duty (VED) system will operate for newly-registered vehicles. VED rates registered prior to April 1 will remain the same as before, but as Steven Ward comments on page 61, the new tax is a bit of a minefield. That’s why all the car manufacturers will be trying to entice you into buying new 17-reg cars in the one month they have from March 1 before the tax increases.

Order an environmentally-friendly vehicle with zero emissions from the tailpipe and the VED stays at zero pounds per annum. However, all those cars which formerly fell into higher emissions brackets will now be subject to a higher first year rate, then a standard rate thereafter; cars costing more than £40k will pay even more due to an additional surcharge. So where you were once paying, say, £20 per annum, you’ll now pay £140 a year.

The table (left) shows the new rates, but here’s the daft thing: a Ford Mustang 5.0 V8 manual will be cheaper to tax! At present, the £36,345 car is in the top bracket at £515 per annum. After April 1, it will cost £2000 for the first year (up from £1120), then £140 each year thereafter! How weird...