Premium car tax. No it doesn’t sound promising does it? But on a little research it seems that the Chancellor George Osborne pledged to overhaul the UK’s car taxation system and what is actually meant by the term ‘premium car tax’ is a premium car tax aimed at more expensive vehicles over £40,000.
Up to now, a CO2-based system has been in place, but as car emissions continue to fall and many cars approach the near or no road tax level, a sliding scale will come into place in 2017. Under the new system, for cars registered after April 2017, car tax for year one will be linked to CO2 emissions. This is where the sliding scale comes into play. However, subsequent years will comprise of just three rates: zero-emissions, which will be free – standard, which will be a flat-rate of £140 which will actually apply to around 95 per cent of cars – and then premium. Premium rate will be £310 per year and applicable to cars over £40,000 list price new. As is the case now, electric cars will remain completely tax-free.
With most short term lease deals though, car tax is managed by the contract hire company. So there’s not too much to worry about there.
There’s no change to fuel duty this year, so the only fluctuations will mirror the price of crude oil! And finally, insurance premium tax is set to rise! It’s set to go up from 6% to 9.5%, so shop around to get the best insurance premiums.