Budget introduces new road tax rates

From 1 May 2009 the road tax rates will changed so as to reflect the government’s plan to move towards a CO2-driven rating system for vehicles.

For cars which were registered before 2 March 2001 there will be just two flat rates which will be based on engine size. Cars with an engine size not over 1549cc will pay £125 for 12 months (£68.75 for 6 months), whilst cars with engines over 1549cc will pay £190 (£104.50 for 6 months).

For cars registered after March 2001, there is to be a more fundamental change in that the number of bands for taxation will be increased from the current A-G system to a new 13 band system ranging from A–M, all of which are based on the car’s carbon dioxide emissions. The more CO2 a car emits, the more it will cost to tax. In addition, anyone who buys a new car from April 2010 will have to pay a higher rate of vehicle tax in the first year of registration – thus further penalising the purchasers of those cars which emit most CO2.

The rates from 1 May 2009 for a petrol car (TC48) and diesel car (TC49) are:

where * Band K includes cars that have a CO2 figure over 225g/km but were registered before 23 March 2006.

and for alternative fuel cars (TC59), the rates are: