Road Tax Changes in 2020 - What Will I Pay?
This year has been anything but normal, and that goes for motoring rules and regulations too. Many MOT expiry dates have been extended, driving lessons and tests have been postponed, and we've seen some of the lowest petrol prices for more than a decade over the last few months.
That said, Vehicle Excise Duty (VED) - usually called road tax or car tax - was still reviewed and overhauled as part of the Spring Budget in April. For many drivers, this means that the amount of road tax owed will have increased. But how much road tax will you need to pay in 2020?
We've broken down the changes below to make sense of the latest VED updates.
Road tax in 2020 - what has changed?
Road/car tax tends to go up every year, and 2020 is no different. The amount of road tax you will pay this year will depend on the type of car or van you drive and how old it is.
Since 2001, the Vehicle Excise Duty system and what drivers pay has been determined by the level of emissions a vehicle emits. The more pollutants a car produces into the atmosphere, the higher the rate of road tax will be payable. This is why diesel vehicles are more expensive to tax than hybrid ones. The system is designed to encourage motorists to choose cleaner models to lower the overall level of harmful emissions our vehicles create. Purely electric vehicles are free to tax since they produce no emissions.
This year, the biggest change to road tax is that the method for measuring levels of car emissions has changed from the New European Driving Cycle tests (NEDC) to the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). The WLTP system generates more accurate emission level results than the old NEDC tests, as well as more realistic fuel consumption and driving range readings.
It's a change that's been in the pipeline for a while - vehicle testing has been transitioning from NEDC to WLTP since 2017 - but 2020 is the first year that road tax has been based on WLTP testing rather than NEDC testing.
Will my road tax be more expensive in 2020?
The likely answer is yes, especially if your vehicle has a bigger engine. More accurate emissions testing means that on average most cars will move up a road tax band and become more expensive to tax.
To give an idea of how road tax has increased, let's take a look at the 2020 first year road tax bands for new cars by type:
As the chart shows, a petrol or 'clean' diesel car is cheaper to tax than a diesel one. Clean diesel cars are those that meet the standards of the RDE2 (Real Driving Emissions) on-road driving test, which also complies with the Euro 6d standard.
The 2020 road tax bands above apply to new cars registered after 1st April 2020. But what about the road tax for cars registered before this date?
Basically, the amount of road tax you pay in 2020 will depend on when your car was first registered.
If your car was registered after April 2017 and before April 2020
After your initial tax payment, there is a flat rate for road tax for the second payment onwards, depending on what kind of car you have:
- Petrol and diesel cars - £150 a year
- Alternative fuels - £140 a year
If your car had a list price of £40,000 or more, there's an added annual tax of £325 to pay each year for five years, from the the second payment.
Here we outline the tax payments for cars registered after April 2017 and before April 2020. Check Now >
If your car was registered after March 2001 and before April 2017
For cars registered between these dates, the amount of road tax payable will depend on the fuel type and the level of CO2 emissions produced. You can find your car's emission details on your V5C registration certificate, or you can check your car's emission details online.
As in previous years, there is no road tax to pay on any type of car that emits up to 100g/km - it's free! Don't forget though, it's still necessary to actually apply for tax for these low emission vehicles even when there's nothing to pay, otherwise you can be fined up to £1,000.
Petrol and diesel cars that produce up to 120g/km of CO2 emissions can be taxed for £30 a year or less, while alternative fuel cars that produce up to the same amount can be taxed for £20 a year or less.
You can see a full breakdown of the current road tax bands for cars registered between these dates on the gov.uk website.
If your car was registered before March 2001
For older cars, road tax comes down to the size of the engine:
- Engines less than 1550 cc - £160 a year
- Engines 1550 cc and over - £265 a year
What about road tax for vans in 2020?
For vans under 3.500kg, the amount of road tax payable depends on how old the van is:
|Light goods vehicle||After March 2001||£260|
|Euro 4||1 March 2003 - 31 Dec 2006||£140|
|Euro 5||1 Jan 2009 - 31 Dec 2010||£140|
Keep your road tax costs down with a used car
As is the case every year, the biggest road tax hikes in 2020 are on new cars. So, if you're in the market for a new set of wheels, you can avoid a large car tax costs by opting for a used car instead. Many of the fantastic used cars and vans we have here at our Carbase and Vanbase stores are just a couple of years old.
We have a great range of petrol, diesel and hybrid used vehicles that are just as safe, stylish and comfortable as new, just without the hefty tax bill. Why not see for yourself and check out our used cars or used vans now?