Rishi Sunak may have to break income tax promise says expert
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Soon the 2020/2021 tax year will come to an end and the 2021/2022 tax year will begin. With the start of the new tax year, some taxes and allowances are planned for an increase. Vehicle Excise Duty (VED) will rise from April, it was announced in the Budget earlier in March.
How much is Vehicle Excise Duty?
Cars registered on or after April 1, 2017, have to pay tax when the car is first registered.
Vehicle tax is then paid every six or 12 months at a different rate.
How much vehicle tax has to be paid on a vehicle registered after April 1, 2017, can be found on the Government website.
Cars registered between March 1, 2001, and March 31, 2017, pay a rate of vehicle tax based on fuel type and CO2 emissions.
You can find out how much vehicle tax has to be paid on cars registered during this period on the Government website.
Some vehicles which emit zero grams 0g of CO2 may not be subject to any vehicle tax.
VED rates tend to increase on an annual basis.
Will your car tax go up?
VED, often called road tax, will rise in line with inflation in April 2021.
The annual standard flat rate of road tax, which is paid after the vehicle’s first registered year, is £155 – an increase from £150 in the 2020/2021 tax year.
Cars that cost more than £40,000 are subject to an additional tax rate.
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From April 2021, this amount will rise from £325 to £335 per year.
This amount is paid for the first five years after the car has been registered.
James Andrews, finance expert at comparison site Money.co.uk, told the Mirror: “People with petrol and diesel cars will see vehicle excise duty rise to £155 a year, while the tax on premium cars – i.e. those costing more than £40,000 new – now pay an eye-watering £335 a year for the first five years of ownership.
“First year rates are also increasing, with cars that produce between 76g/km and 170g/km of carbon dioxide will seeing their bills rise by £5, people with cars in the 171g/km to 190g/km will see a £25 rise; there’s a £30 rise for people with cars producing 191g/km to 225g/km, £40 for 226g/km to 255g/km vehicles and a whopping £70 increase for everything above that.”
Will fuel duty rise?
Earlier in March, Mr Sunak announced in the Budget fuel duty will be frozen for the 10th year in a row.
When he announced the Budget, Mr Sunak said: “Right now, to keep the cost of living low, I’m not prepared to increase the cost of a tank of fuel.
“So the planned increase in fuel duty is also cancelled.”
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