The cost of motoring encompasses more than just fuel and maintenance; it extends to the often-overlooked Road Fund Licence (RFL). Understanding the intricacies of this annual fee is crucial for motorists, especially when considering the £390 per annum supplement for vehicles over £40,000 and the exemptions granted to zero-emission vehicles.
The Basics of Road Fund Licence:
The Road Fund Licence, colloquially known as road tax, is a mandatory annual fee imposed on all vehicles using public roads in the United Kingdom. The funds collected are intended to contribute to the maintenance and improvement of the road infrastructure across the country.
First-year Road Tax Rate
The first-year of road tax is included in a car's on the road price when supplied from new. It is calculated dependant on the vehicles emissions and ranges from £0 for zero-emission vehicles to £2,605 for vehicles with a Co2 of over 255g/km
Standard RFL Costs:
The standard cost of the Road Fund Licence depends on the vehicle's emissions and fuel type. In recent years, there has been a conscious effort to encourage eco-friendly choices by imposing higher charges on high-emission vehicles.
Supplement for Vehicles Over £40,000:
One noteworthy aspect of the RFL is the current £390 supplement imposed on vehicles with a list price exceeding £40,000. This supplement is applied for five years starting from the second time the vehicle is taxed. The supplement aims to address the environmental impact of luxury vehicles and to generate additional revenue for road improvements.
Many buyers can choose vehicles which start off with a list price under £40,000 and have an annual road tax bill of approximately £170, but by adding a few optional extras, and creeping over the £40,000 limit, suddenly their road tax is increased to £560.
Exemption for Zero Emission Vehicles:
In a bid to promote sustainability and reduce the carbon footprint, the UK government provides a welcome exemption to zero-emission vehicles. These vehicles, which include fully electric and hydrogen fuel cell cars, are eligible for a 100% discount on the standard Road Fund Licence.
This exemption serves as a powerful incentive for consumers to embrace cleaner and greener transportation options.
Conclusion:
As the automotive landscape evolves, so too do the policies surrounding road taxes. Motorists should stay informed to make financially savvy and environmentally conscious choices. Whether it's embracing zero-emission vehicles or managing the supplement, which let’s face it, £40,000 these days is perhaps not getting the high-end vehicles this supplement supposedly penalises.
Let us guide you to a well-informed approach when selecting your vehicles.
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