Budget 2015

[user 816]

The UK Budget 2015

Well that did us little favour! Basically the government has said all this eco stuff is fine but they are losing too much tax so lets forget it! - it seems the environment only matters to them when its a way of making money of us.

Currently PHEV's are fully exempt. New PHEV's from 2017 will only pay £10 in road tax for the 1st year, but it will be £140 a year after that. The same as something putting out 255g/km! (unless it costs over £40,000 then it gets an extra surcharge aded. What's has the cost of the vehicle got to do with it?)

The only redeeming thing is the 255g vehicle will get hammered for £1700 in the first year although that's hardly likely to bother someone who can afford an £85,000 car in the first place as many options would dwarf that.

Its sad that the manufacturers have played their part and done a lot of good work cleaning up cars as asked and now the goal posts move again. In our PHEV's we will pay £110 less than say a BMW 3 series diesel at 100g first year but the same then on year after year.

How much is a Hummer?

 

[TerryB]

Strange, the 'incentive' to have lower emission vehicles was the lower VED.

Now you may as well go back to 4.5 litre V6 in a sub £40,000 car.

What a mockery

 

[pheverish]

Strange, the 'incentive' to have lower emission vehicles was the lower VED.

Now you may as well go back to 4.5 litre V6 in a sub £40,000 car.

What a mockery

And will that car deliver a theoretical unlimited mpg?
How much will it cost to service?
Will it drive on pure electric for those shorter journeys?
What will the BIK be?
Will you get London Congestion Charge Exemption?
etc. etc.

We all choose our cars for different reasons depending on our circumstances - £140 a year is not a deal breaker and would not stop me buying another PHEV

 

[Titan]

Think i read that more than 70% of new car registrations would be VED free by 2017, hence the change. At least the money will now be spent on roads and not simply disappear in government coffers.

 

[LEONIDIS]

I was wondering why my PHEV had been crying on the front drive this afternoon when I got home from work!

Now I know! :|

 

[kentphev]

Remember the Tories are the party of Fracking. Environment will always come second to just about everything else.

 

[user 816]

Although the sum isn't a deal-breaker at £140 I agree, I think they should have kept the 0-49g category as free to give a small incentive towards encouraging manufacturers to keep developing hybrids.

I appreciate they have lost a lot of revenue with so many now breaking the 100g/km level (most vehicles will soon) but few normal fossil fuel only vehicles are going to be below 50g/km any time soon. Its of course technically possible but it would mean too much compromise in size and performance to sell any!

So it wouldn't have hurt revenue to leave the ultra low band free as its only a few thousand vehicles among millions but it would show some willing to encourage hybrid development that has more to explore than the ICE car which must be reaching the end of the line in economy.

 

[ian4x4]

Does anyone know what is happening to the EV/PHEV £5000 initial grant,

I know it is under review and the low emission cars have been split into 3 categories.

How is the grant system going to be modified?

 

[RichardOFB]

The wording of the budget statement appears to say the new VED rates apply to "new vehicles registered after 1st April 2017"

Does that mean that all of use who have recently taken delivery of our current PHEVs (or will be rushing to get them before the new rules start on 1st April 2017) comes under the "current CO2 rules" (1st March 2001 to 31st March 2017) which means it stays as the Band A rate ( CO2 less than 100g/km) which is currently £zero, but I guess will increase each year


I still have my 1999 Subaru, which has an engine bigger than 1549cc, so is taxed at the "pre March 2001" rate of £225 (this year)
and I have a 1999 Honda, which has an engine smaller than 1549cc, so it is £140 this year



so will there now be three price ranges depending on the date the car was registered?

1) above/below 1549cc if before March 2001
2) bands A to M depending on CO2 if registered April 2001 to March 2017
3) new 10(?) level initial fee, then 3 bands, if after April 2017

 

[user 816]

The wording of the budget statement appears to say the new VED rates apply to "new vehicles registered after 1st April 2017"

Does that mean that all of use who have recently taken delivery of our current PHEVs (or will be rushing to get them before the new rules start on 1st April 2017) comes under the "current CO2 rules" (1st March 2001 to 31st March 2017) which means it stays as the Band A rate ( CO2 less than 100g/km) which is currently £zero, but I guess will increase each year


I still have my 1999 Subaru, which has an engine bigger than 1549cc, so is taxed at the "pre March 2001" rate of £225 (this year)
and I have a 1999 Honda, which has an engine smaller than 1549cc, so it is £140 this year



so will there now be three price ranges depending on the date the car was registered?

1) above/below 1549cc if before March 2001
2) bands A to M depending on CO2 if registered April 2001 to March 2017
3) new 10(?) level initial fee, then 3 bands, if after April 2017

I was wondering that, I had assumed the 1st year rates wouldn't apply but the £140 subsequent years charge would even for us as its a new system... but not so sure now.

If our existing vehicles do go from zero to £140 the lease companies won't be amused as they will have to take it on the chin.

 

[greendwarf]

Unfortunately governments have to raise taxes to pay for things the public want. It seems rather selfish to complain about paying a modest fee for the roads we drive on - or would we prefer tolls?

Having listened live to the Budget, my understanding was that rates for existing cars would not go up (so we should retain our Zero Band) but also that there would be a lower charge, i.e. not £140, for some new cars, which suggests that the EV incentive would continue.

 

[user 816]

Unfortunately governments have to raise taxes to pay for things the public want. It seems rather selfish to complain about paying a modest fee for the roads we drive on - or would we prefer tolls?

Having listened live to the Budget, my understanding was that rates for existing cars would not go up (so we should retain our Zero Band) but also that there would be a lower charge, i.e. not £140, for some new cars, which suggests that the EV incentive would continue.

I agree road tax is not unreasonable, but it has been used as an incentive for cleaner car development which is obviously a desirable direction. It seems with these changes it is slightly less so now.

There will remain a no charge incentive for zero emission vehicles, pure electrics, but even those are being hit by a substantial rise in company car tax over coming years.

According to the BBC report (http://www.bbc.co.uk/news/business-33447106), existing drivers or those bought up until 1st April 2017 will remain on the current system and charges for the remaining life of the car so £0 for us. The above only from then on new registrations.

Could cause a bit of a hybrid sales scramble just before the date then!

 

[RichardOFB]

When I was looking a buying my PHEV, I found a web page on a government web site that said the Band A VED rate for the next few (5?) years would be £zero.

I didn't think it would be zero for ever, but I think our PHEVs (and similar hybrids) will be in the current Band A (less than 100g/km) for ever.

BUT
I think that future budget announcements will change the price for each of the bands (A to M?)
I think the first four bands (A to D) are currently free.

so perhaps next years budget will make Band D (121 to 130 g/km) a tenner a year?

then the year after C (111 to 120 g/km) might become a tenner and D goes up to £20 ?

then the year after .. B (101 to 110 g/km) because a tenner, C and D go up an extra tenner each?

and then another year and our band A (under 100 g/km) will start paying "a tenner a year"?

which I think would be a reasonable way of doing it.
I wasn't expecting it to be free for ever, but I was expecting the current banding system to stay, and the price of each band to get juggled around by future governments,
after all, if the government really wanted to encourage new car buyers into "going green" wouldn't it have made more sense to keep the sliding scale of "more pollution means more annual tax"?

not that these amounts are going to make huge differences to people who can afford to buy or lease a new car, but in a few years time, when it becomes a "used" car, wouldn't a "green" government want to encourage the "poorer people" who can't afford to buy a new car, where the extra £10 or £20 a year on the tax disc makes a bigger difference in their annual costs for running a car?

 

[ian4x4]

I still am unsure of the future grant status.
https://www.gov.uk/government/publications/plug-in-car-grant/plug-in-car-grant-vehicles
This document amends the original categories and says that a review was started in May.
I read an article that says that Mitsubishi had had a meeting with the government about this and were not 100% pleased with outcome.
Since then I have read nothing except that due mainly to the Outlander PHEV sales success the original total car grant was running out quickly.
By the way, I note the promise to spend this new VED money on roads doesn't start until after the next election (plenty of time to change their mind again)

 

[Regulo]

"Straying off-topic, as we are, I wonder how long before the UK's vehicle duty bands will be re-evaluated? There are ever-increasing numbers of cars meeting the nil-rate of tax, and the treasury will not want to lose too much of the motorists cash. It's sure to come, just when, is the question."

Posted by me, on the 26th June. Told you so! .

 

[spellinn]

If our existing vehicles do go from zero to £140 the lease companies won't be amused as they will have to take it on the chin.

Tax changes to bands usually apply to "new registrations" only so existing vehicles we should be safe.

However, the last time the VED increased for all vehicles across the board, my lease company charged me the difference, so most certainly didn't "take it on the chin"

Depends on your contract perhaps?

Cheers

Neil

 

[RichardOFB]

I would have thought you would be okay if you already have it, but it would be "interesting " if you were signing a new contract in March 2017, for a car to be delivered in April.

Most contracts I've seen (bother to read) have a little bit of small print to say the price can change if the VAT rate changes, or any other government set taxes, which are beyond the lease company control.
I guess if it was a tenner a year, they wouldnt bother with the paperwork, but for 140 a year, I think they would pass on the extra cost

 

[Wuduslad]

I hadn't seen any of the budget details until now. Having had a company car all my working life and driving in excess of 50k a year I never had to worry about RED.
BUT, as far as my own vehicles are concerned,they sometimes stay on my drive 3 or 4 days a week. They only use the roads 3 or 4 days a week yet I have to pay full RED even for the days they stay put. I've always thought that the system is wrong. What they should do is load the tax onto the fuel at the pump. That way the people, companies,lorries, buses etc. that clock up the mileage will pay for the roads. It would also mean that 'tax dodgers' would have to pay through their fuel purchases.
Nowadays, being retired, the Outlander is perfect for me as most of my daily mileage is less than 30 and I don't pay tax on the days it stays put. Should I need to use the ICE, I wouldn't mind paying the fuel tax. I've always thought that increased fuel costs would be an incentive for people to think before they buy or drive a vehicle. Obviously there will always be the better off people that want a fuel gobbler, so let them, it's their choice.Perhaps the tax relief incentives should be on the purchase price of the vehicle i.e. no tax on EV's but relative tax levels on less fuel efficient vehicles Having said all that, they will always find away of extracting tax from us one way or another.