The way cars are taxed in the UK will change from April 1st 2017.
Under the new system, all cars registered from 1st April will pay a one off charge for the first year and a standard rate thereafter.
The one off charge is based on a heavily revised version of the current tax band system.
The standard rates are £0 which will only apply to electric and hydrogen powered vehicles & £140 which will apply to all other vehicles.
But wait there's more! If your vehicle costs more than £40,000, you will have to pay an additional supplement of £310 each year for 5 years.
There are also different standard rates for different fuel type such as bi-ethanol and LPG.
So for example let's take a look at the Jaguar F-Type which has an on the road price of £59,050 and emits 234 g/km of C02.
Here is what it will pay under the new system:
Years 2 - 5
£450 each year
Year 6 onwards
Its first year of tax will be £2,010. This is because the first year of tax is based on C02 emissions and the F-Type falls under the 226-255 band which is £1,700. It also costs more than £40,000 so it has to pay the supplement charge of £310
From the second year the F-Type falls under the standard tax band of £140, but also has to pay the extra £310 for another 4 years.
This new system also means that electric vehicles may also have to pay the supplement charge if they cost over £40,000.
Take a look at the new Tax Band table and the standard charges based on fuel table below.
Emissions (g/km of CO2)
First Year Rate
Cars above £40,000 pay £310 annual supplement for five years
Petrol or Diesel
Alternative fuel vehicles include hybrids, bi-ethanol and liquid petroleum gas.