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Old 15-05-2018   #1
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First Year tax rates and pre-reg cars

Not Panda-related, but does anyone know how the new (post-April 2017) vehicle excise duty rules work with pre-reg cars and ex demos? The charts show a variable figure for the first year, which increases depending on CO2. Is this higher figure only payable on first registration, or is it also payable if you buy a nearly-new vehicle within one year of it being registered? My other half is looking at Volvos to replace her horrid V50. Some versions have quite high First Year tax levels, so I'm thinking that a nearly-new example would be an attractive option if, as a pre-regd vehicle, it would only be subject to the 140 flat rate. (Some massive pre-reg savings to be had over new, too, and some incredible PCH deals on the bigger models - the Chinese owners must be pouring money hand over fist into the brand).
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Old 15-05-2018   #2
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Re: First Year tax rates and pre-reg cars

Hi Gareth. DVLA tables here. https://www.gov.uk/vehicle-tax-rate-tables

As an aside, say you wanted a 2017 Panda TA Cross, it would have to be registered by 31.03.17 to still have 30 rfl. If you'd bought it new in March '17 the rfl would still be free at first registration so when traded in you wouldn't get any refund. Now you would in twelths of 140 on a Panda. I got 75 back when traded in my Lounge. Hope this helps. Are dealers able to get a refund on the showroom tax when owner number 2 takes the car on, no idea. Discounts are good on a lot of makes. 7100 off a new Nissan Xtrail is big for example.
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Last edited by Al D; 15-05-2018 at 15:44. Reason: Further info.
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Old 15-05-2018   #3
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Re: First Year tax rates and pre-reg cars

Looks like you would have to pay it pro-rata for any months left of the first year since registration, same as any road tax. So if car was registered 3 months ago you would have to pay 9/12 ths or 75% of the first year figure. You could try to get it included in the purchase price. If not included you want to take delivery on the 1st of the month, not the end.
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Old 15-05-2018   #4
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Re: First Year tax rates and pre-reg cars

The only way in which the new First Year excise duty rate makes sense, if it's a one-off on first registration (which I think it must be) is if the registering dealer only gets back a proportion of the normal flat-rate yearly amount, rather than a proportion of the First Year rate, when they come to sell a pre-reg/demo car on (given that car tax can't be transferred any more). That way, the tax man still gets his full whack of duty, and the rationale of the First Year rate (discouraging the registration of new cars with higher rate CO2 emissions) is maintained, albeit that the eventual owner, who only ever pays the flat rate, isn't the least bit discouraged by the First Year rate. Who the hell dreamed that piece of nonsense up?
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Old 15-05-2018   #5
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Re: First Year tax rates and pre-reg cars

Quote Originally Posted by g8rpi View Post
Looks like you would have to pay it pro-rata for any months left of the first year since registration, same as any road tax. So if car was registered 3 months ago you would have to pay 9/12 ths or 75% of the first year figure. You could try to get it included in the purchase price. If not included you want to take delivery on the 1st of the month, not the end.
Robert G8RPI .
Yes, that would be the logical way of doing it, but the way the DVLA charge for vehicle excise duty isn't set up that way. It seems to be based on one of two figures for 12 months - the First Year rate, or the flat rate - not 75% of one and 25% of the other!
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Panda Cross Twinair, 15 Reg, in glorious Yellow
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Old 15-05-2018   #6
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Re: First Year tax rates and pre-reg cars

Wording on DVLA link worrying: "This payment (showroom tax on the road) covers your vehicle for 12 months". And "rates for second rfl payment onwards"- it doesn't say what age the car is. So doubt you have to pay the larger figure again. 450 subsequent rfl for 5 years if car had RRP of 40k. Though the best Volvo I would have with a blank cheque is less than this (XC60 T5).
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Old 15-05-2018   #7
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Re: First Year tax rates and pre-reg cars

I've looked pretty carefully and the difference is the first year tax is higher and must be paid in a single payment. The only thing that is unclear is if you sell or SORN the vehicle in the first year can you claim the remaining tax back. If you can't then the first payment still covers the remaining months so a purchaser of a pre-registered car would never pay the higher rate. If the first owner can claim a refund then the next seller would have to pay pro-rata for the remain her after they purchased. The first option seems more logical, but in either case a second owner would not pay the full first year high rate.

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Old 15-05-2018   #8
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Re: First Year tax rates and pre-reg cars

Quote Originally Posted by Al D View Post
Wording on DVLA link worrying: "This payment (showroom tax on the road) covers your vehicle for 12 months". And "rates for second rfl payment onwards"- it doesn't say what age the car is. So doubt you have to pay the larger figure again.
Many thanks for that! It's possible to read that DVLA explanation as saying that the first year payment is a one-off "showroom tax" which covers the car's rfl for the first year, irrespective of whether it changes ownership during that period, but that runs contrary to the main thrust of the 2017 changes, which was to make rfl non-transferable. Clear as mud!
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Last edited by gar074; 15-05-2018 at 18:09.
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Old 15-05-2018   #9
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Re: First Year tax rates and pre-reg cars

Quote Originally Posted by g8rpi View Post
I've looked pretty carefully and the difference is the first year tax is higher and must be paid in a single payment. The only thing that is unclear is if you sell or SORN the vehicle in the first year can you claim the remaining tax back. If you can't then the first payment still covers the remaining months so a purchaser of a pre-registered car would never pay the higher rate. If the first owner can claim a refund then the next seller would have to pay pro-rata for the remain her after they purchased. The first option seems more logical, but in either case a second owner would not pay the full first year high rate.
Given the number of vehicles that get sold on during their first year (ex-demo, pre-registered, etc) you'd think the DVLA would take the trouble to make the position clear on their website, wouldn't you?!
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Panda Cross Twinair, 15 Reg, in glorious Yellow
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