Taxing times on the way

There’s still time to beat the first-year vehicle tax hikes, but you’ll need to hurry. As from 1st April, the DVLA will be changing the way it calculates tax on all new cars. The amount payable will be based on CO2 emissions, with an annual flat rate of £140 for all normal petrol or diesel cars, £130 for alternative fuel vehicles (hybrids, biethanol and LPG) and zero-emission cars remaining tax-exempt.

If you buy a vehicle with a list price (the published price before any discounts) of more than £40,000, you’ll pay a rate based on CO2 emissions the first time it’s taxed. Then, when you tax it for the second time you’ll pay one of the new rates (depending on the vehicle) and an additional rate of £310 a year for the next 5 years. After 5 years, your vehicle will then be taxed at one of the new rates again.