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What's the road tax for alternatively-fuelled vehicles in 2021?
Please clarify if the following applies to all vehicles using alternative fuels or just those registered within specific years: 'Alternative fuelled vehicles, including hybrids, bioethanol and liquid petroleum gas, pay £145 per year.'
Asked on 9 March 2021 by Bill Biggs
Answered by
Georgia Petrie
Sure, I'll try to clarify the overall changes that may affect you. The updated VED rates that have been announced recently in the Budget apply to cars first registered on or after 1 April 2017. The new rates take effect on 1 April 2021. As before, the amount of first-year VED you’ll pay will depend on your new car’s CO2 emissions. Fully electric and hydrogen fuel cell cars will retain their road-tax (VED) exemption status, as a result of having zero tailpipe emissions. After this initial 12-month period, every petrol, diesel and hybrid-powered car will set you back £155 per year to tax – £5 more than in 2020 – while cars powered by biofuel or liquid-petroleum gas (LPG) will cost £145 per year to tax (up from £140).
Cars that cost £40k or more (after options) are subject to a further £335 annual supplement (up from £325 in the last financial year) that runs for five years. This kicks in after the first-year CO2-based charge, so you’ll pay the supplement from years two to six of the car’s life. After that, the annual road tax reverts back to the £155 a year (£145 for AFVs) charge. Fully electric cars are the only exception to this rule.
Cars that cost £40k or more (after options) are subject to a further £335 annual supplement (up from £325 in the last financial year) that runs for five years. This kicks in after the first-year CO2-based charge, so you’ll pay the supplement from years two to six of the car’s life. After that, the annual road tax reverts back to the £155 a year (£145 for AFVs) charge. Fully electric cars are the only exception to this rule.
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