New tax burden for motorist

NEW car buyers are facing a significant tax burden due to a 'showroom tax' to be introduced today.
By The Newsroom
Published 30th Mar 2010, 18:41 BST
Updated 30th Mar 2010, 18:47 BST

Research has revealed that the worse-hit models will face an additional tax burden of over 300 in the first year.

The new regulations come into effect today (April 1) and are the second stage of taxation based on a vehicle's C02 emissions.

Hide Ad
Hide Ad

Matt Thompson, of Auto Trader, said: "Following its introduction in the 2008 budget, the Showroom Tax has been brought in over a two-year time span."

Buyers can avoid the tax increase by purchasing before April 1st, or by looking more closely at their requirements and choosing a car that falls into a lower taxation band. A Honda CR-V with 190g/km C02 emissions currently costs 210 per year in VED, but a model bought after April 1st will cost 550 for the first year.

Thompson adds, "Popular cars with lower emissions such as the Mini Cooper, Ford Fiesta and Vauxhall Corsa will now avoid car tax for the first year thanks to the new system. “

Drivers and eco-friendly motorists who don't want to be stung by the new Showroom Tax, should choose a vehicle from tax-band A. Smart Fortwo Cdi's, the Ford Fiesta ECOnetic and the Volkswagen Polo BlueMotion are among the cars avoiding tax altogether - and not just in the first year." A Ford Fiesta 1.25 petrol currently costs 120 per year in tax, but after April 1st the first 12 months VED will be zero.