Its the start of the new tax year and with it comes the usual round of price hikes that will affect the cost of many day to day items. Just in case you didn’t realise what’s gone up – here is a handy list
- NHS prescription charges up by 20p to £8.60
- Dental check ups will rise to £20.60
- TV licenses are up £1.50 to £147
- Water bills up by £6
- Energy firms have announced increased tariffs of between 5% and 8%
- Stamps are up – First Class is now 65p and Second Class is 56p
- Council tax up by about 3%
- Air passenger duty on long haul flights up by 2.7%
- BT and mobile phone companies are putting up prices too
There are also new rules on the car tax front.
In summer 2016 former Chancellor of the Exchequer George Osborne announced a radical overhaul of the UK’s system for taxing cars, known as Vehicle Excise Duty, or VED. The new regulations come into force on 1 April, and will make some cars much more expensive to run.
The amount of VED you pay will still be based partly on your car’s CO2 emissions. However, while the government has been trying to push people into hybrid vehicles by making many of them free to tax, the benefit of choosing one will be substantially reduced after 1 April.
New cars will still be divided into 13 different CO2 bands, which will determine how much you pay in the first year of ownership, but only zero-emission vehicles, such as electric cars, will qualify for the lowest band and therefore be tax-free.
From the second year onwards, zero-emission vehicles that cost less than £40,000 new remain tax-free, while a flat rate of £140 a year will be payable for petrol and diesel cars that cost less than £40,000, and £130 for hybrids. All cars that cost more than £40,000 attract an additional ‘Premium’ fee of £310 for years two to six of ownership, regardless of their emissions.
This means that electric cars which cost more than £40,000 – and currently qualify for free car tax every year – will no longer be the tax-busting option they are currently.
If you buy your car before 1 April 2017, you won’t be affected by these changes because they only apply to cars registered on or after that date. Your car tax will continue to be calculated using the old system of CO2 emissions, meaning that in the vast majority of cases you’ll be better off hanging on to your old car.