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…

What do you think will be the effects of the showroom tax in your dealership?

By Richard Aucock

First-year ‘Showroom Tax’ VED rates in 2010-11
Band A (up to 100g/km CO2): £0
Band B (101-110g/km CO2): £0
Band C (111-120g/km CO2): £0
Band D (121-130g/km CO2): £0
Band E (131-140g/km CO2): £110
Band F (141- 150g/km CO2): £125
Band G (151 to 165g/km CO2): £155
Band H (166 to 175g/km CO2): £250
Band I (176 to 185g/km CO2): £300
Band J (186 to 200g/km CO2): £425
Band K (201 to 225g/km CO2): £550
Band L (226 to 255g/km CO2): £750
Band M (Over 255g/km CO2): £950

VED Rates in 2010-11
Band A (up to 100g/km CO2): £0
Band B (101-110g/km CO2): £20
Band C (111-120g/km CO2): £30
Band D (121-130g/km CO2): £90
Band E (131-140g/km CO2): £110
Band F (141- 150g/km CO2): £125
Band G (151 to 165g/km CO2): £155
Band H (166 to 175g/km CO2): £180
Band I (176 to 185g/km CO2): £200
Band J (186 to 200g/km CO2): £235
Band K (201 to 225g/km CO2): £245
Band L (226 to 255g/km CO2): £425
Band M (Over 255g/km CO2): £435

Tags: Budget, showroom tax

This entry was last updated on Monday, March 8th, 2010 at 11:37 pm and is filed under News.