Upcoming amendments made to the way that road tax is calculated means that drivers could be taxed thousands of pounds just for selecting one optional extra on your car.
From April 1st next year, the overhaul of the Vehicle Excise Duty regime as laid out by chancellor George Osborne’s Summer Budget last August will include the so-called ‘luxury tax’ element.
Any car that costs over £40,000 will be subject to an additional £310 payment on top of its tax costs for five years, a rule which will even extend to luxury zero-emissions vehicles like the Tesla Model S.
Tax calculated by total price of the car
However, customers who buy a car for less than £40,000 could still see themselves caught out, as the taxable value of the car is based not on its list price, but total price including options.
This means that drivers who buy a car even in the mid-£30,000 region could see themselves paying out for the additional tax money just by adding on a few optional extras.
Despite the fact that modern cars are now better equipped than ever, certain models can still charge a premium for many features drivers will consider essentials, like sat-nav or a reversing camera.
One £50 option could cost up to £1,600
Depending on which car you buy and which options you choose, a couple of extras could mean the difference between paying the £140 a year flat fee and £450 or more.
As an extreme example, a car which costs £39,995 and which comes with a single £50 option will from April 2017 cost its driver a total of £1,600 over five years.
However, it’s worth noting that the new tax rules will only apply to new cars bought after 1st April next year, and any vehicle purchased prior to that date will be taxed according to the current rules.
