New rules affecting UK motorists are due to come into force this year. The Department of Transport confirmed the first of these changes takes effect from today, with a change in car tax rules from 1 April 2021.
Vehicle Excise Duty (VED) is increasing for less environmentally-friendly cars.
The amount of VED due is based on the car’s CO2 emissions. Cars emitting zero grams per kilometre of CO2 pay zero car tax. Petrol- and diesel-powered drivers (including hybrids) that emit between 1g and 50g per kilometre pay £10 in VED for the first 12 months. Cars that emit between 51g and 5g per kilometre continue to pay £25 for the first year. Cars that emit between 76g and 150g per kilometre of CO2 will now pay £220, an increase of £5.
Cars that emit more than 255g per kilometre of CO2 will now pay £2,245 to tax for the first year, up from £2,175 in 2020.
The standard rate, payable after the second year, is now £155 a year for all cars registered on or after 1 April 2017 that are not zero-emissions vehicles.
Benefit in Kind (BiK) rates, which were dropped to nil in March 2020 to encourage electric car usage through the use of salary sacrifice schemes, have been reinstated.
From April, drivers may have to pay as much as £390 per year to use their vehicles due to BiKs reintroduction.
The charge is being brought back at 1%, based on income rates and vehicle value, and is expected to increase to 2% in 2022; substantially lower than in 2019 when they were at 16%.
Changes to mobile phone rules are also due to come into effect later this year. The new rule will see drivers face a £200 fine and six penalty points for holding their phone while driving under new laws coming in this year.
The ban replaces a loophole which currently allows people to take photos and videos while driving without being penalised.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
