What is the April 2020 Road Tax Increase?
From April 2020 changes are going to be made to the Vehicle Excise Duty (VED) rates, which are also known as road tax.
In this guide, we take a look at everything you need to know about the changes to car road tax in April 2020 and what you can do to avoid paying more.
What is the road tax increase and what is changing?
Drivers in the UK have to pay Vehicle Excise Duty (or car tax) and the amount you must pay depends on factors like the engine size of your car, fuel type and the amount of CO2 emissions your vehicle produces when it is registered.
Put simply, the lower your CO2 emissions, the less you pay. This is why diesel car owners generally pay higher rates of VED than those who own a petrol car and why the latest Ford cars and other models are being made to be more environmentally friendly. People who own electric cars are exempt from paying the road tax.
So, what’s changing? The test used to see how much CO2 your vehicle emits is called the New European Driving Cycle (NEDC), but this has become outdated. From April, new cars will be going through a different test called the Worldwide Harmonised Light Vehicle Test Procedure (WLTP), which has been designed to better reflect real-world output.
This means that CO2 ratings of cars will increase, and you will be placed in a higher tax band to the current rate.
When will the road tax increase?
From 1 April 2020, the Vehicle Excise Duty will be introduced and then on 6 April 2020 the Benefit-in-Kind on Company Car Tax will be implemented. This will affect your first road tax payment when you buy and register a new vehicle after these dates.
How much will the road tax increase?
The government has reviewed the impact of WLTP and it estimates that more than 50% of cars will see an increase of between 10% and 20%. This essentially means motorists who are buying a new car from April 2020 could see themselves paying an increased road tax compared to someone who has bought an identical model before this date.
This will only affect the initial purchase price of the car.
What tax band is your car in?
If you are looking to buy a new Ford car or any other new car after 1 April, then take a look at the below table we have created to help you calculate which tax band the vehicle will be in.
|VED Band||CO2 Emissions (g/km)||First-Year Rate||First-Year Rate for non-RDE2 Diesels||Alternative Fuel Vehicles|
What should I do about it?
If you’re thinking about buying a new car, the best thing you can do is to buy it and register it before 31 March 2020, otherwise, you will end up paying more for it.
Here we have shared an example about how the road tax will change on a Ford Galaxy model.
Model: Ford Galaxy 1.6 TDCi Titanium
Current VED tax band (and rate): Band E (£145)
VED tax band (and rate) from 1st April 2020: Band H (£210)
Difference of VED: £65
Get ahead of the game and visit one of our Ford dealerships to find out the special offers we have available on new cars.