New car tax changes coming this year could cost drivers £130 extra

NEW car taxes are set to be introduced in April 2022 and most drivers will be affected.

From spring, drivers will pay an increased eco-friendly Vehicle Excise Duty (VED), with annual car tax prices set to increase by up to £130.

The new 2022 car tax, which was first mentioned at the Autumn Budget 2021, will vary in price and it all comes down to the amount of CO2 emissions your vehicle is producing.

The tax hikes come as the government ramps up its efforts to reduce CO2 emissions in the UK.

With a push for electric cars to become the most common vehicles across the country, it comes as no surprise that the tax will not apply to these vehicles as they don't produce any CO2.

All diesel, petrol and other fuel-powered vehicles will fall under the new VED rules and will be looking at extra costs.

Car tax is split into two parts, a standard rate and your VED rate.

The standard rate is a one-off fee of £155. This will rise to £165 from April 1, 2022.

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From April, cars that cost more than £40,000 will be required to pay a higher one-off standard fee of £490.

The lowest band of tax will be for vehicles that produce between 1g to 50g of CO2 per kilometre.

The drivers that will feel the increase the most are those in the highest tax band, those releasing more than 255g of CO2 emissions per km.

The tax rate for this band is £2,245 this tax year, jumping to £2,365 in the 2022/23 tax year – an increase of £130.

Here is all the new 2022/23 VED tax bands:

  • 1g to 50g – £10
  • 51g to 75g – £25
  • 76g to 90g – £125
  • 91g to 100g – £150
  • 101g to 110g – £170
  • 111g to 130g – £190
  • 131 to 150g – £230
  • 151g to 170g – £585
  • 171g to 190g – £945
  • 191g to 225g – £1,420
  • 226g to 255g – £2,015
  • over 255g – £2,365

RAC head of roads policy Nicholas Lyes said: “With car tax rates increasing in line with inflation from April, taxing petrol and diesel vehicles will be a little more costly for drivers.

"But zero rates for electric cars might encourage people to make the switch to zero-emission driving and cut their tax and fuel bills."

The tax increases will be a further blow to motorists who are already feeling the bite from record high petrol costs.

The price of fuel reached 144.9p a litre in November, making it more expensive than ever to fill up a car.

Alongside the VED increases, two new Clean Air Zones are launching in the UK in Bradford and Manchester.

The zones in both cities will work slightly differently than those in London, with Bradford's charge not applied to private cars and motorbikes.

Greater Manchester's Clean Air Zone will launch May 2022.

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