If you’re currently on the lookout for a new vehicle then there are several reasons why right now is the perfect time to think about it a little more seriously.
Though not much has been announced in the mainstream press, changes are coming that will hit your wallet, including an increase in Vehicle Excise Duty. In this article, we will look into ways that you can ensure the increase doesn’t affect you.
Though nothing was announced in this year’s budget, in 2020, the Government announced that there would be increases from the first day of the 2021/2022 tax year – which is Tuesday the 6th of April 2021, or the day after the Easter Monday bank holiday.
As we’ve already mentioned, these cost increases will not just affect those who pay Vehicle Excise Duty (which is also referred to by many as Road Tax or Road Fund Licence) it will also affect Company Car Tax (which is also referred to as BIK or Benefit-in-Kind).
Vehicle Excise Duty increases
All Vehicle Excise Duty charges are worked out according to the CO2 emissions of the vehicle you are driving, with electric cars – that emit 0g/km of CO2 facing a £0 annual bill for being on the roads, while the largest vehicles that emit the largest amount of CO2 will face a bill of over £2,000 for the first year.
We have put together a table that shows you the difference you will see between bills from 2020/2021 and this year.
The cost of Vehicle Excise Duty for subsequent payments has also increased by £10 from £145 to £155 for any vehicles with emissions above 1g/km.
If you’re looking to save money and would like to avoid the high increase for the first year of your Vehicle Excise Duty, the best way to do this is to either purchase an electric vehicle or have your new vehicle delivered and registered before the 6th of April. Get in touch with us on 01903 538835, let us help you find your new car.
Company Car Tax
If you drive a car for your business then the chances are, you’re already aware of Company Car Tax and Benefit in Kind.
In 2020, Benefit in Kind for electric vehicles was reduced to 0%, which is amazing. This year the price will be going up to 1%.
There will also be an increase in the cost of Company Car Tax for those who are driving vehicles with a higher rate of CO2 emissions. If you would like to find out more about the cost increases between 2020 and 2023, we have detailed them in our essential guide to Company Car Tax.
Fuel Duty Freeze
For all that there are increases to be seen in the coming weeks, we did get some good news in the 2021 March budget, for the tenth year in a row, there has been no increase in the tax on fuel, which currently stands at 57.95p per litre of petrol, diesel, biodiesel and bioethanol.
