Budget 2015 Bad News :-(

[ohcomeon]

Until we actually see the wording in the Finance Bill there's no way to be sure. Currently lots of people are paraphrasing this point in ways that suggest either that expensive EVs will or won't pay the £310.

The wording in the actual budget says that it applies to cars that have an RRP over £40k, in the first 5 years "in which the standard charge is paid". Feel free to debate whether or not it is possible to "pay" a standard charge of £0

i have taken it to mean that there is an additional tax on nice high value cars of £310pa over and above the road tax (whether £0, £140 or any other amount). IMHO this is to at least partially compensate the government on revenue received from road tax that has now been pledged to go into the roads.

 

[renim]

disclaimer (I'm not in/not from the UK)
my impression of the UKs changes are
pure EVs stay good
but PHEVs will be treated like normal ICE cars for the annual fees
which was decided in a forecast that nearly most new London cars will transition to PHEVs to avoid congestion tax.

City of London treats PHEVs as EVs because within city zones, PHEVs are Zero Emission.
National Government treats PHEVs as ICE, because anybody who is rich enough to buy a new car, will mostly get a PHEV.

 

[4dme]

ohcomeon, Having just looked over the finance bill making it's way through the Houses of Parliament at the moment, you are correct. It states that any car registered on or after 1st April 2017 that has a CO2 emissions value of 0g/km and a price that exceeds £40,000 will attract a VED bill of £310.

 

[martinwinlow]

I raised this matter with my MP Mr Mark Prisk who took it up with Mr Damian Hinds (Exchequer Secretary to the Treasury) and here is his Mr Hinds' reply (OCR'ed from his letter - so forgive errors):-

"HM Treasury, 1 Horse Guards Road London SW1A ZHQ

Dear Mark,

Thank you for your letter of 21 July to Andrew Jones enclosing correspondence from your constituent about Vehicle Excise Duty (VED). Your letter has been passed to the Treasury. I am replying as Minister responsible for this policy area and I am sorry for the delay.

I would like to thank Mr Winlow for raising his concerns about the new VED system that was announced at the recent Budget, and in particular about the fact that the standard rate supplement for cars worth above £40,000 also applies to fully electric cars.

it may help if I explain that the updated CO2 banding in first year rates in the new VED system strengthens the incentive to purchase the cleanest cars including plug-in and hybrid vehicles. Zero emission cars, even those with a list price above £40,000 are particularly incentivised as they pay zero first year rates.

in subsequent years rates of VED are flat for all cars, except zero emission cars which continue to pay nothing. As Mr Winlow points out, there will be a standard rate supplement of £310 for all cars worth above £40,000 which will apply for the first five years a standard rate is paid. These changes will improve fairness across all motorists and ensure that premium cars, including low carbon and electric premium cars pay more than ordinary family cars. Only a small proportion of people can afford cars above £40,000 and it is fair that people who can afford the most expensive cars pay more.

Mr Winlow may be interested to know that the Government supports ultra—low emission vehicles in a number of other ways. The Government's Plug—|n Car Grant provides a discount of 35% (up to £5000) off the purchase cost of a new ultra—low emission vehicle which includes fully electric vehicles like the Tesla Model S Mr Winlow mentions in his I letter. To date more than 40,000 ultra—low emission vehicles have been supported in this way, and the Government recently confirmed that the grant would remain at this level until at least February 2016. A grant to support the purchase of a home charge oint is also available, through the Electric Vehicle Homecharge Scheme This gives EV owners up to £700 off the cost of a home chargepoint. The Government has also funded public charging infrastructure across the country and helped to Create Europe's largest rapid charging network. Please pass my thanks..." blah, blah.

For what it is worth...! MW

 

[J1mbo]

Only a small proportion of people can afford cars above £40,000 and it is fair that people who can afford the most expensive cars pay more.

Not counting the £2,000 extra VAT you pay on the cheapest MS over a £39,999 car...

Thanks for confirming that.

 

[WannabeOwner]

Only a small proportion of people can afford cars above £40,000 and it is fair that people who can afford the most expensive cars pay more.

Ordinarily I would agree with a progressive tax.

However, in this instance I take a different view. To get an EV with "decent range" you are going to have to pay North of £40K. So plenty of people who need to do long journeys (my personal example is 30K miles a year, of which probably 20K is business, and much of that is 100-150 mile journeys (each way) in a day), and who want to switch to EV to help the planet, are going to have to find the money some how. Some of those will be rich enough to afford it, and I agree the tax for them is not a deterrent, but (for example) the Tesla forum has plenty of examples of evangelists who are spending way more than they would ordinarily be comfortable with in order to be part of the green revolution. A short range EV, the type ideally suited to a metropolitan commuter, would be hopeless for me as I live out in the sticks. Equally being excused from paying the London Congestion Charge is of no benefit to me, as I have no occasion to drive into London, and so on.

So an upshot of taxing long-range EVs is to remove many potential buyers. Many of those, myself included, would not ordinarily spend £80K on a car, but with reasonable incentives will do so, and in so doing voluntarily create a demand for, and help the industry develop, longer-range alternative energy vehicles. Until the EV marketplace matures this needs to be done collaboratively between Government (i.e. subsidies) and members of the public willing/wanting to help.

Progressive / punitive "luxury" tax on longer range EVs will have the effect of encouraging car makers to concentrate on short range vehicles, and only local commuters will be able to use those.

If I'm talking Horse, and there are sub-£40K vehicles that have reasonable range, which are suitable for business drivers needing reasonable range on a daily basis, then I'd appreciate being corrected.

If not you are welcome to use my comments in any reply to the Minister that you choose to make (although I expect that the same thought has occurred to everyone else, so there is absolutely no need to quote me, as such)

In case this is quoted elsewhere, and in case not obvious, EV = 100% Electric Vehicle (i.e. NOT a Hybrid)