At the moment, the annual car tax or (Vehicle Excise Duty VED) rates, for cars registered before 1st March 2001, are determined by engine size alone. With one rate, £120 for engine sizes up to and including 1549cc and £185 for engines over 1549cc.
The rates for cars registered after the 1st March 2001 are determined by CO2 emissions and type of fuel used. This information is on the car’s log book - also called a V5 document.
In the budget, the Chancellor said he wanted to crack down hard on the 'dirtiest' cars because Britain's 30 million vehicles accounted for 22% of the country's carbon emissions. From 2009/10 the 7 current A to G tax bands will be replaced with 13 tax bands (A to M), with high CO2 producing 4x4s car sports cars being heavily taxed.
Also revealed in the budget, are plans to introduce a ‘showroom tax’. Buyers of the highest polluters will have to pay up to £950 for their first tax disc. Buyers of cars like the Toyota Prius will go tax free.
Below are the banding for the indicated C02 emissions as (g/km). Four rates are indicated for each banding; 2008/09; 2009/10; 2010/11; 2010/11 (1st year)
CO2 : 2008/09 : 2009/10 : 2010/11 : 2010/11 (1st)
< 100 : £0 : £0 : £0 : £0
101-110 : £35 : £20 : £20 : £0
111-120 : £35 : £30 : £35 : £0
121-130 : £120 : £90 : £95 : £0
131-140 : £120 : £110 : £115 : £115
141-150 : £120 : £120 : £125 : £125
151-160 : £145 : £150 : £155 : £155
161-170 : £145/170: £175 : £180 : £250
171-180 : £145/170: £205 : £210 : £300
181-200 : £170/210: £260 : £270 : £425
201-225 : £210 : £300 : £310 : £550
226-255 : £400 : £415 : £430 : £750
over 255 : £400 : £440 : £455 : £950
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