Showroom Tax - VED from April 2010
D Brailey

Vehicle Excise Duty (VED), Road Tax, Vehicle Tax, Car Tax. Already known by a few different names, come April we can add "Showroom Tax" to the mix. In fairness though, this is more of a sub category referring to the new, inflated 1st year VED on higher CO2 producing vehicles.

Let me explain. As a way of making new car buyers consider the environmental impact of their next car purchase the government are introducing a different rate for 1st year vehicle tax. Employing this approach will avoid retroactively penalising people who had bought a heavy polluting vehicle before they knew there would be a cost.

After the first year is past the VED will revert to another figure and there it will remain, until the next budget at least.

Let us run an example on a Jaguar XF 3.0 Petrol Luxury.

If you bought one of these cars before April 2010 then, as is normally the case, you would pay a charge for VED, for this example it would be £405. You will pay £425 in one year's time and a similar figure for each following year. If you buy the same vehicle in April 2010 you will pay £750, the showroom tax, for the first year's VED and then in one year's time you will pay something like £425 for each subsequent year.

Our example has a CO2 of 249g/km. For your reference here are a couple of tables displaying the bands and their costs.

2010-11 1st Year VED

2010-11 standard VED