The New Diesel Tax Changes Explained
By Amanda | 11-04-2018
From April 2018, car tax for older diesel cars increased in the UK, but how does this affect fleet operators? Below is a short guide on the changes that have now been put in place.
Vehicle Excise Duty (VED)
The government announced in the Autumn Budget 2017 that it would be increasing car tax on some diesel cars from April 2018 in a bid to dissuade motorists driving older diesel cars and improve the general air quality in the UK.
Company car owners running diesel cars that do not meet the Euro 6 emissions standard, will now be required to pay a band higher car tax than they currently do.
Below is a table outlining the car tax bands from April 2017 and the increased rate for April 2018.
BIK surcharge increase
In addition, the Benefit-in-Kind (BIK) surcharge of 3% has been increased to 4% this month. This means that more than 800,000 drivers of diesel company cars, including the latest Euro 6 models, ›will pay out £70 million extra in diesel company car tax in the tax year running from 2018-2019.
The BIK surcharge on diesel company cars (but not diesel hybrids) will be applied to all cars unless they meet the Real Driving Emissions Step 2 standard (RDE2), which comes into play and affects new car models from September 2018 onwards, and which applies to all new registrations from September 2019.
Why has the RDE2 test been introduced?
One of the requirements for new cars to pass the current Euro 6 emissions testing is that they must emit less than 80mg/km of toxic nitrogen oxides (NOx), but some cars that have passed the lab tests have actually gone on to emit more than 80mg/km in the real world - the new RDE2 test is designed to eliminate this discrepancy.
At present, it is estimated that no diesel cars currently on UK roads will be exempt from the increased surcharge as few, if any, will meet the RDE2 standards between 2018-2019. This means that approximately 800,000 drivers will pay out more tax.
The future for diesel cars
The government predicts that the new VED charges will have little impact on driver behaviour in terms of choosing a diesel car due to the “low level of the tax increase in relation to car purchase price”.
With around 350,000 company car drivers replacing their cars every year, most of the affected drivers will have the opportunity to choose new cars that are not subject to the supplement.
The government estimates the tax rise will raise an additional £125 million in 2018/19, reducing to £50 million in 2019/20 and £10 million in 2020/21. The additional money raised will be used for a clean air fund to help local authorities meet clean air targets.
If you've enjoyed this article please help us share it with the rest of the world - Thank you
- Our First Business Award
- Win a VIP Family Day out to Lightwater Valley
- New Manager for Leeds Depot
- New Opening Times
- Special Deals throughout Summer
- New Curtain Side Luton Vehicles On Fleet this week
- We Launch our New Company Film
- ISO 9001:2015 The Revised Quality Management Systems Standard
- Change in Car Tax is imminent
- Helping Harrogate Bloom
- Mowbray School Outing
- Winner of the VIP Family Day to Lightwater Valley
- Eclipse Energy Efficiency
- Brian walks the length of the country in record time
- 64 Year Old Brian’s EpicWalk
- Proud Sponsors of the Huddersfield Giant
- Bus Gates now operating in Huddersfield
- Arrow Talks to Students at School Careers Fair
- Huddersfield Giants Kit Promotional Video
- Try one of our NEW Petrol Hybrids
- Dealing with Road Rage
- White Rose Awards
- Testing Your Eyes Can Save Your Life
- Driving in Fog
- Driver Fatigue: The Facts
- Harriers Play Host
- Flat Cap Friday Success
- Tax Discs to be Phased Out
- Sheffield Branch Opening Soon
- Aquaforce Charity Football Match
- Winner of the Yorkshire Show Business Card Draw
- New Custom Made Recovery Trucks
- Hull Depot wins Best Vehicle Hire 2017
- Examiner Business Awards 2017
- Saint Michael's Hospice Thanks Knaresborough
- Welcome to our first ever female mechanic
- 1988 - 2018
- Increase in Congestion Charge PCN
- What Brexit Could Mean for Fleet Managers
- Meet our MD James Hill
- What can we expect from electric vehicles in the future?
- Celebrating our Women
- Winners of the Family Business of the Year for the Yorkshire and Humber at the FSB Awards 2018
- A Paperless Future
- The rise of the new van owner
- The New Diesel Tax Changes Explained
- #SuperEorl Competition: Which Cartoon Character or Super Hero does Big Eorl most resemble and why?
- Drivers' worst habits according to van owners
- Family Ties Traced to 1938 between Arrow Self Drive and Crowther & Shaw
- Support for Leeds Beckett Charity Ride
- What is AdBlue?
- Business Of the Year
- The Great Yorkshire Show Birthday Celebrations
- Shortlisted for the Great British Entrepreneur of the Year Awards
- Wakefield Depot raise funds for Wakefield Hospice
- Arrow Self Drive Becomes 100% Family owned
- A Visit to Sheffield Children's Hospital
- Arrow Supports Christmas Charit-trees
- My Passion: By our MD James Hill
- At Your Service!
- My Passion by James Hill
- Arrow Self Drive Continual Training & Staff Development
- The New London Ultra Low Emission Zone (ULEZ): 2 months to go
- Leeds Clean Air Zone: 11 months to go
- AdBlue: A guide for fleet managers
- Competition winners enjoy Day as A Super League player with the Giants
- CSR and Sales
- Our New Paperless Rental System: Saving one Tree at a Time
- Reducing our Carbon Footprint