Motorists have been praying to the ‘Great God of Fossil Fuel’ for years to get car manufacturers to be a little more realistic about the emissions and MPG claims for their vehicles; we’ve always known that manufacturers massage the figures, but surely, we can work out for ourselves that a Range Rover won’t offer the same economy as a small Nissan, people just want honesty about it.
The Worldwide Harmonised Light Vehicle Test Procedure (WLTP), which came fully in to force on 1st September 2018, has forced the manufacturers hand in to doing just that – being more realistic with the claimed figures, and in conjunction with the Real Driving Emissions (RDE) test, we should see at least semi-accurate figures being released.
Vehicle Excise Duty
Vehicle Excise Duty (VED), commonly known as car or vehicle tax, is generally based upon emissions, although the full regulations are quite complicated (and we simply don’t have the space for an in-depth review here), a shift toward more realistic emissions or MPG figures could, in theory, have a detrimental effect on VED.
We know that motoring and motorists are seen as an easy target for revenue generation – the last swathe of VED changes came as a result of the government not generating the expected revenue thanks in part to electric and hybrid vehicles, and that manufacturers are complying with their legislation and making more economical vehicles (less fuel duty, lower VED).
Changes were made to include some of the greenest cars – even zero emission vehicles are taxable if the list price is more than £40,000; it’s not purchase price, but manufacturer price, this also includes cars that are less than £40,000 but are then specced up with any additions or items of value, including higher specification engines.
Currently, any new diesel vehicle that doesn’t comply with the RDE2 emissions (which don’t actually come in to force until 2020) is subject to being categorised as one band higher than the official rating for the first year– to ‘encourage’ manufacturers to produce cleaner diesels, you’ll also pay a further £310 ‘luxury’ surcharge on anything costing over £40,000. (Petrol, diesel, hybrid or electric).
The point we’re making here is that the government has basically introduced new rates and legislation as a ‘catch all’ exercise to recoup some of their lost revenue. Now with the introduction of more and more electric and zero emissions vehicles, surely the government may introduce more methods to increase their revenue on the motorist.
The older vehicles (registered before 1st April 2017) will continue to pay VED at the old rate, based purely on CO2 emissions, but could a retrospective re-categorisation be introduced? After all, it’s a long-known fact that car makers have been a little reluctant in being completely open about the emissions of their vehicles, all the government would be doing is effectively charging the actual rate, rather than one based on fiction. Perhaps ‘the motorist’ should be thankful that we’ve had it so cheap for so long?
It’s very unlikely that a retrospective change will be imposed, but it does mean that there is a high chance that a model bought after 1st April of this year will undoubtedly cost more to tax than one purchased before that date, for the exact same model, purely because the figures used are more representative of real-world conditions. Yes, there have been campaigns by numerous consumer groups to highlight the extent of the problem, but with little regard given to the longer-term implications for the motorist – another financial hammer blow.
There is very little to be done – the first year’s VED is generally included in the OTR (On The Road) price of the vehicle, so with some negotiation, that can be negated to an extent, but going forward, it seems that the want for honest emission statements from the manufacturer will now be a need for further expenditure.
If you’re looking for a new car, then now is the right time to get yourself down to your favoured dealership as they try and clear the stockpile of cars that can’t be sold ‘as new’ due to the WLTP regulations – you’ll no doubt find a range of cars from all the main dealerships with significant discounts attached to the price.
It’s also worth noting that motorcycles don’t use the CO2 based taxation system, it’s based upon engine size, the most expensive being £88 for anything above 600cc, the cheapest being just £19 for the year (under 150cc) so if you’re looking for cheap VED vehicles, that are easy to park, cut a swathe through traffic and are generally congestion charge free, they are worth a consideration, if you are that way inclined.
What do you think about the new VED rate? Will the government retrospectively change categories? Are there any concerns for the future? Let us know in the comments.