Sorry but this post refers possibly to other models as well!

Can anyone explain the rationale whereby if you purchase a car with a list price over £40000 you have to pay a higher rate of tax? As I see it under the new taxation rules buying a new non electric car you have to pay a lump sum upfront dependent on level of emissions. If your car is under £40000 list price you then pay £150 annually Car tax .

However if you car has a list price over £40000 you have pay £325 extra a year for the next 5 years. What the hell is all about? For example my car cost £42000 and has CO2 emission level of 185 gm/km so I have to pay £475 tax annually. However if I had bought a more polluting vehicle eg a Ford Ranger with an emission level of 225gm/ km and less than £40000 list price I would pay £500 more upfront then £150 a year car tax .

What the hell has list price got to do with emissions. Nothing. Being over £40000 does not mean necessarily it’s more polluting! Why should someone who wants to pay more than £40000 for a car be penalised?( they pay more VAT anyway) It makes no sense whatsoever as I view it!  Why didnt motoring manufacturers and organisations challenge the government on this nonsensical way of taxation?

Motorhome manufactures did and it now seems you can buy a £75000 motor home and pay the standard £150 a year tax on a vehicle which undoubtedly is more polluting than a car!
Sorry if I’ve misinterpreted the rules but it seem that they are penalising anyone buying a car with a list price over the £40000 threshold and there are a few Skodas that exceed that price especially if you go for some nice options. 
 

Do they ever make sense? Just cash making scheme.

 

If you were being a real optimist you could say it encourages car makers to build cheaper efficient cars.

 

The idea is purely if you can afford to pay 40k for your car, we want some of that... Oh yes and the environment

The extra for over £40,000 has nothing to do with emissions. Whoever said it had?  Two elements are involved: tax on emissions and tax on “luxury”.

On 26/09/2020 at 07:38, DaveMiller said:

The extra for over £40,000 has nothing to do with emissions. Whoever said it had?  Two elements are involved: tax on emissions and tax on “luxury”.

 

Thats the reason.

Just wait for the fiscal drag to work on it though.

In 25yr you'll be paying the luxury top up tax on a Vauxhall Vivo (equivalent).

 

First year tax on a gutsy car is - £2,175 as well.

 

https://www.gov.uk/vehicle-tax-rate-tables

 

Thats why you see a lot of adverts on new cars with "first year tax included" or youd find your new motor costing £2k more than you thought.

And be really, really careful. The £40K limit is the list price of the car on the day before its registered, NOT the list price on the day you order it. With long lead times for factory orders, it's quite possible for there to be a few price rises and even if the price you pay on collection is protected, the list price isn't.

 

So you might be exceedingly careful over your options list and feel clever because it's just below £40K list price threshold when you place the order. Yay! Then when you get the notice of registration, several months and a few price rises later, you have a WTF moment because, for sure, the dealer will either have lied to you or just never told you that your car now breaches the higher-rate VED threshold. 

Would you have grounds to refuse the vehicle in this case?

Good Q Marky - you might guess that this was the situation I found myself in.

 

I carefully chose the options so that the list price was about £200 < £40K threshold, price protected. As the months rolled on, I noted the list price increases and did my research, panicked when I realised what the VED rules are and that my car now has a list price > £40K. Phoned dealer, salesperson was adamant that it was the list price at the time of order, and anyway, they supplied the list price to the DVLA/HMRC, implying that there was some, er, scope for slight dishonesty, so not to worry, my car would definitely not attract the higher VED rate (and of course I believed her).

 

When the registration letter arrived, oh yes, of course my car was now in the > £40K VED band. To my credit, I was totally calm when I phoned the dealer and asked WTF? Since I had the VED 'promises' as emails, I simply stated that they had 2 choices: sell me the car at a bigger discount to cover the extra 4 years of higher VED (year one was included in the price) or I simply walk away, no bother to me, still had the old car (not true) and another car in the household (true) and if necessary I would get my deposit back via legal action if they decided they'd keep it (it was only £100 but nonetheless.....). They thought about it for an hour or so and then offered me the higher discount, whilst muttering that they'd lost money on the deal because the discount was already huge, matching the best respectable broker price, blah blah, sob story, have to sell the children into slavery.

 

So that's why your Q is a good one - if I didn't have the incriminating emails, not sure what the legal position would be. Is it up to the buyer to be aware of the rules? - they are pretty clear on the car taxation web site, and everyone knows a car salesperson will p**s in your pockets and tell you it's raining.

 

And if there's a no-deal Brexit, although there will no doubt be price protection on factory orders, the list price is likely to increase substantially because of import tariffs, let alone the regular price increases. You have been warned.....