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Sunday, June 26, 2022

Petrol and diesel drivers to be hit with road tax increase

All non-electric vehicle drivers are facing a hit to the pocket with road tax rates set to increase.

Nearly all motorists are being hit in the pocket with Vehicle Excise Duty (VED) known as “car tax” or “road tax” rates set to increase on 1 April 2022.

The amount of road tax that you will have to pay will depend entirely on how “green” your car is – judged by the CO2 emissions from the exhaust pipe.

This is amid rising utility and food prices in 2021 and warnings that energy bills could go up even further this year.

Only 2% of cars on the road are electric or hybrid. Image: Ernest Ojeh.

Trade body Energy UK has forecast that gas and electricity bills could rise by up to 50% by the spring.

Despite electric vehicle registrations being up by 76.3% (accounting for 190,727 new vehicles on the road) in 2021 than the previous year, only 2% of cars on the road are electric or a hybrid, according to car marketplace, Heycar.

Statistics from the Department of Transport show that only 1,894 electric vehicles are registered to people in Bradford as of September of last year.

The number is similar for Kirklees, clocking in at 1787 electric cars and 23,746 in Leeds. The North East has a total of 9399 electric vehicles on their roads.

Across Yorkshire and the Humber, there are 1508 electric vehicle charging points. In West Yorkshire, there are 88 rapid charging points, 22 of which are in the Bradford district.  In the North East, there are 910 charging points.

The changes to the car tax rates were first announced during last year’s Autumn Budget by Chancellor of the Exchequer Rishi Sunak in October 2021.

Vehicles that are “gas guzzlers” and models that produce high levels of air pollution are set to be most impacted.

Most drivers will be hit with an increase in road tax. Image: Wassim Chouak.

Vehicles producing over 255 g/km of CO2 pollution will see a massive rise of £120, from the current rate of £2,245 to £2,365.

Meanwhile, drivers of cars producing 226 to 255 g/km will see a £105 rise, with fees for cars producing 191 to 225 g/km increasing by £75.

Price rises will be seen across all vehicles except for those producing less than 75 g/km of CO2. Electric vehicles will remain exempt from paying VED.

The Treasury has previously estimated they will need to fill a £40bn black hole because of the loss of VED and fuel duty rates from electric vehicles.

HM Revenue and Customs said the rise is to ensure VED rates are uprated with the Retail Prices Index (RPI).

They said increasing VED rates in 2022 will ensure rates are “maintained in real terms” and that changes will ensure motorists “make a fair contribution to the public finances”.

Rates for those hiring a car under a salary sacrifice scheme known as Benefit in Kind (Bi) are also set to increase.

Employees who have electric cars leased to them by their employers will also have to pay an increase in tax.

Employees with electric cars supplied by their work for personal use will see a rise from one to two percent for fully electric cars and those producing between one and 50g/km of pollution with an electric range of more than 130 miles.

Prices will also increase by one percent for all other models regardless of pollution levels. However, vehicles that produce 156 to 169g per km or over 170g per km will see no changes with fees remaining at 37 percent.

Businesses in Bradford including areas in Manningham, Shipley and Saltaire will have to pay a daily charge for driving in, out, or around the Clean Air Zone if their vehicles do not comply with the new CAZ Policy.

Taxi drivers whose cars do not comply will have to pay £7 a day, with minibuses paying £9 a pop, and HGV’s having to pay £50 a day to drive in the area.

The date for the CAZ has been pushed back from 1 January to a yet-determined date in the spring to “allow more businesses to access grants” from the Council.

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