Martin Lewis gives money-saving advice on VED car tax
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From Spring, petrol and diesel owners will be hit with changes to Vehicle Excise Duty which could see some paying up to £130 extra. Meanwhile, new Benefit in Kind (BiK) changes and Clean Air Zones will also be introduced pushing heavy fees on road users.
Owners of the most polluting petrol and diesel vehicles could pay up to £120 more as a result of the changes set to launch in the Spring.
VED changes will increase for almost all emissions ranges with those producing more pollution set for the highest rises.
Vehicles producing CO2 emissions of over 255g per km will see their first-year rate rise from £2,245 to £2,365.
Meanwhile, vehicles producing between 226 and 255g per km will see increases from £1,910 to £2,015.
Those producing between 76 and 90g per km will see a first-year rate rise of just £5 extra to £120.
However, cars below this will see no changes to fees with electric cars remaining at £0.
HM Revenue and Customs have confirmed the changes are not expected to have any significant economic impacts”.
However, it said the update would “impact motorists owning a car, van or motorcycle”.
It warned the increase in VED rates is in-line with RPI meaning rates will “remain unchanged in real terms for vehicle owners”.
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Benefit in Kind
Rates for those hiring a car under a salary sacrifice scheme are also set for new charges in 2022.
BiK rates will rise from one to two percent for fully electric cars and those producing between one and 50g/km of pollution with an electric range of more than 130 miles.
Prices will also increase by one percent for all other models regardless of pollution levels.
However, vehicles that produce 156 to 169g per km or over 170g per km will see no changes with fees remaining at 37 percent.
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