UK Car Tax Changes

New car tax changes have been implemented in London as of October 25th by Sadiq Khan as part of the government’s mission to reduce air pollution in the city, and encourage owners of older vehicles to switch to compliant vehicles, or resort to walking or cycling. 

Anyone driving through London’s Ultra Low Emission Zone will be penalised if you have a higher polluting vehicle, and will be charged £12.50 per day on top of the congestion charge, which is £15 per day. However, drivers will face a £160 fine if they fail to pay the new ULEZ fee. The research, from, found that motorists who would need to pay both the Congestion Charge and the ULEZ fee could see figures reach more than £10,000. Meanwhile, lorries, buses, coaches and other heavier vehicles face a £36,400 bill for a ULEZ fee if using their vehicle every day of the year at £100 a day. 

Only vehicles that meet Euro 4 diesel emissions or Euro 6 petrol emissions will be exempt from the charge, thereby ruling out practically all classics and forcing people to sell or scrap their cars. Selling your vehicle may be an obvious solution, as right now used car prices are 24% higher than they were in January 2020, and they can be sold for good money to people living outside of London. The positive news is though, that Transport for London recently announced grants to help drivers scrap their older, higher polluting vehicles for money towards a new ULEZ compatible car. Also, there are exemptions for vehicles in historical tax status, for example any classic vehicle manufactured before 1st January 1981, meaning you don’t have to pay if you don’t want a newer, zero emission alternative.

Motorists can check whether their car is compatible using Transport for London’s online vehicle checker. You simply enter your registration plate and choose the country of registration. 

The expansion not only covers Central London now, but includes most of the capital’s roads between the North and South circular. Other cities such as Bath and Birmingham also have clean air zones in place, and many other cities in the UK have also begun to consider implementing clean air zones to bring down pollution.

The solution to the inflated tax charges is investing in an electric vehicle. These lower polluting vehicles are exempt from the traditional vehicle excise duty (VED) and fuel duty taxes in addition to clean air zone fees, making them a practical option. Although many potential buyers are concerned about the range they’ll get with an electric car, Julie David, Director of Peugeot UK stated their research busted the myth that electric vehicles are only good for shorter journeys. She went on to say that fully electric cars actually cover more miles per week in comparison to petrol vehicles. 

According to the government, six in ten households in the expanded ULEZ zone don’t own a car but suffer bad air quality which is caused by polluting petrol and diesel vehicles. These changes are all in a bid to change that and to make London a climate leader.

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