New Showroom Tax Set To Hit Gas Guzzlers

Monday, 22. February 2010

From the 1^st April 2010 the new showroom tax is being introduced to severely penalise the most polluting cars. In addition the annual road fund licence (tax) increases also. In essence the showroom tax includes the first year’s road fund licence. The bandings run from A to M with A representing cars with CO2 emissions of less than 100 g/km with M representing cars emitting 265 g/km or more. For vehicles emitting 256 or more g/km of CO2 (the top band) the showroom tax added to the price of the car is £950 with the annual road fund licence thereafter increasing to £435 per annum. At the very low end the showroom tax is free as is the road fund licence thereafter. As a result of the changes many manufacturers are continuing any promotions until the end of March by which time all vehicles must be delivered. New rates will then be announced with effect from the 1^st April to take account of the showroom tax and future road fund licence. But beware, if you are considering a low emission car and feel that you would benefit by holding on to wait for a reduced road fund licence to take effect on the monthly rate, you may be in for a surprise as manufacturers move their bonuses around and into the larger, less fuel efficient, cars in order to soften the blow of the showroom tax and subsequent years’ road fund licence. My continuing advice remains: if you see a car that looks good value and it fits your budget then go for it – you may regret taking no immediate action. By Graham Hill