April 1 Showroom tax

SHOWROOM tax rates of up to £950 will be added onto the retail price of new cars from April 1.

The first-year VED rate comes into force for high CO2 emission cars – and will be a shock to car buyers!

It was announced in the Budget last year but has since been forgotten by those in the market for new cars. The highly publicised scrappage scheme has diverted attention from the emissions-based tax – but is set to hit high-polluters hard.

Here’s a brief fact-finder on the key issues…

What’s it all about?
It is the Government’s way of penalising high-emission cars and encouraging low-emission sales.

£950 for road tax though – what’s that all about?
Cars emitting more than 255g/km will be hit with this first-year rate. This will be added to the delivery charge of the vehicle – and may result in list price rises of around £500 for high-polluters.

So that’s nearly £1k every year for road tax of big-engined cars, then?
No. After the first year VED rate, charges revert to the standard road tax rate. This, for a high-CO2 car, will be £435.

How can I help car buyers to avoid it?
Guide them to a car that emits 130g/km CO2 or less. These cars escape the ‘showroom tax’. Even better, if they emit less than 100g/km, they are charged no road tax fee at all!

Sounds like money will be made by someone here
Well, according to the BBC, changes to vehicle excise duty is forecast to raise £735m for the Government in 2010-11…