In 2017 it was announced, the tax of diesel cars in the UK are set to increase from the beginning of April 2018. Under the new rules, cars that release between 191g/km and 22 g/km of CO2 emissions, they will pay £500 more for the first 12 months. This means that diesel cars which do not meet a pre-determined emissions standard, will be required to pay a band higher car tax than they are currently paying. The tax rule will only be applied to new diesel cars not vans or commercial vehicles. Luckily, existing diesel cars which are already out on the road will not be affected. No new cars will be able to meet the emission standard, therefore those considering of purchasing a brand new diesel car from April 2018, the new tax charge will be applied to those vehicles. The announcement of the new tax rule will influence a number of things such as reduction in air pollution, the market of diesel cars, customer purchasing decisions, employment in the diesel car sector and deciding which towing car to choose. Read on, to find out more.
Which cars will be affected the most?
If you’re considering of purchasing a brand new diesel car this year, be wary of which cars will be affected the most when the new tax charge comes into place. We have listed below the new cars which will be impacted the most by the tax increase.
- Audi SQ7 4.0-litre TDI – 199g/km
- Bentley Bentayga 4.0-litre V8 – 210g/km
- Hyundai i800 2.5-litre CRDi – 199g/km
- Mercedes GLS 350d – 199g/km
- Porsche Cayenne 4.2-litre – 209g/km
- Range Rover 4.4-litre SDV8 – 219g/km
- Range Rover Sport 3.0-litre SDV6 – 211g/km
- Ssangyong Rexton 2.2-litre – 194g/km
- Ssangyong Turismo 2.2-litre – 196g/km
- Toyota Land Cruiser 2.8-litre – 194g/km
Why is tax on diesel cars being increased?
The main reason for the tax increase and a major benefit that it will bring to the UK is reduction in air pollution and a cleaner environment. According to the Society of Motor Manufacturers and Traders, on average CO2 emissions from cars that were sold in 2017 were higher than in 2016. This suggests that pollution is increasingly becoming a problem and action needs to be taken to reduce the amount of CO2 emissions and by implementing a tax increase, it will be the first major step in tackling air pollution in the UK. The new changes of tax also support the long-term goal of banning the sale of new cars running solely on petrol or diesel by 2040. The chancellor, Philip Hammond is encouraging car manufacturers to bring forward the next-generation cleaner diesels. Although car manufacturers are investing heavily in the latest low emission technology, it will take years for them to develop the next-generation cleaner diesels. Nevertheless, all the proceeds raised from tax will go towards a new £220 million ‘Clean Air Fund’ to overcome pollution in the UK.
How will this impact the market of diesel cars?
Every diesel car company and manufacturer will be impacted by this and some are not favourable of this change. As more and more steps will be taken to eradicate pollution, this can ultimately threaten the future of diesel cars. The Jaguar company alongside the rest of the motor industry state that diesel cars produce less CO2 than petrol, making them better for the environment.
On the other hand, research from Aston University estimated that the UK market share of diesel cars is set to fall from around 50% to just 15% by 2025. In January 2018, the sales of new diesel cars fell by 25%. As a result of the new tax policy, sales in December 2017 fell to 31.1%. Whereas, electric, hybrid and petrol vehicles sales increased. We may be seeing a decline of diesel cars and a move towards electric and hybrid cars.
The negative publicity of diesel cars showing how they cause excessive amounts of pollution in the UK and the new tax increase will make customers reluctant to buy diesel cars. The downfall in sale figures indicates that the new government policy is a contributing factor which has influenced many diesel customers to switch over to petrol cars. Unfortunately, diesel car companies have no external control over the tax rate and media coverage of diesel cars, therefore they will need to offer eco-friendly initiatives to their customers to refrain them from switching.
It may even impact the choice of fuel a consumer goes for when towing a caravan or trailer. Petrol and diesel cars remain the most common choice for powering tow cars. So, if you are thinking of towing you will need to consider your tax on your caravan as well as the tax on your diesel car. The new tax rate will also have an impact on employment in the UK. If the diesel car sector is slowly declining or may even be completely gone, thousands of jobs in the UK car industry will be under threat.
The introduction of the tax increase will benefit the UK environment and help encourage major corporations to contribute more in adopting an eco-friendly lifestyle. Although, it will affect the future prospect of diesel cars and deter potential diesel buyers. The new tax rule may have influenced your decision to not buy a diesel car or it may have not affected your decision at all. Remember, if you are considering of purchasing a new diesel car, think about the cost of tax on the vehicle.