If you’re planning to buy a new car that will be registered on or after 1st April 2017 you need to know about the changes that are going to be made to the Road Fund Licence – that’s road tax to you and me or the old tax disc.
It is all change for new cars registered from next April… but don’t worry, if you’re not changing your car nothing will change for you until you do. Your licence fees will continue to be calculated in the same way they are now.
Why is it changing?
Way back in the summer of 2015 the Chancellor’s budget announced the changes, but of course we’ve slept since then and most of us have forgotten about it. The new structure is designed to make the charges fairer by ensuring motorists who can afford a ‘premium’ vehicle pay more for their road tax.
What is changing?
Key changes include:
- Your first licence rate will continue to be based on CO2 emissions but the bandings will be changing.
- Your second licence rate will be charged at a standard rate of £140 per year with the exception of zero rate CO2 emitting cars which will be £0.
- An additional charge of £310 per year will apply from the second licence for a period of 5 years for any car with a ‘RFL List Price’* of over £40,000. After 5 years the licence fee will revert to the standard rate.
- Vehicles with an ‘RFL List Price’* over £40,000 but which emit zero CO2 emissions will still have to pay the additional fee for 5 years but will revert back to £0 rate after the 5 years.
Alternative fuel cars will continue to receive a £10 reduction on the charges.
*The RFL List Price includes: manufacturer list price, option prices, delivery charges and any pre-delivery inspection charges, all as at the day before the vehicle is first registered and including VAT.
If you want to know more about how the RFL List Price is calculated or specific details of the current and new CO2 emissions banding, along with some examples of before and after costs, you can download all the details here.