BMW Car Tax

We run through the new road tax charges, so you know how much it will cost to tax your new BMW

There are three road tax systems in place in the UK, making it difficult to know exactly how much it costs to tax your car. Which system is applicable depends on the age of your car. The oldest system is based on engine size, while the two newer systems are based on CO2 emissions (with other factors to consider). Because VED (Vehicle Excise Duty) charges are not exactly straightforward, we’re going to go over each system and explain the 2017 road tax changes in full. If you have any questions, get in touch with our expert team for more information.

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Why have the car tax rules changed?

The new BMW car range is exceptionally clean and efficient. Because BMW and other car manufacturers have been so successful at reducing the CO2 emissions of their vehicles, the amount of revenue the government receives from road tax has fallen over recent years. It therefore needs to compensate for this by charging more, and that includes even low-emission cars.

How are the 2017 tax rates calculated?

In the first year, cars will be charged according to CO2 emissions, with alternative fuel cars benefiting from a £10 discount across the board. After the first year, all cars will attract the same annual charge of £140, although a £10 discount will still apply to alternative fuel cars, and electric cars are tax-exempt. Cars that cost over £40,000 are taxed an additional £310 a year on top of the standard rate, but only from years two to six.

What are the best cars to buy under the 2017 car tax system?

Full-electric vehicles (those costing less than £40,000, at least) are definitely the ones to go for if you want to avoid road tax altogether. However, because the new VED system works on a sliding scale according to CO2 emissions for the first year, you’ll still benefit from buying hybrids such as BMW iPerformance models. A low-emitting plug-in hybrid costs nothing to tax in the first year, compared to £2,000 for a car emitting over 255g/km CO2. In subsequent years you’ll also enjoy an annual £10 saving for owning an alternative fuel car. The following are classed as alternative fuel cars:

  • Hybrids and plug-in hybrids
  • Biofuel cars (bioethanol or biodiesel)
  • Liquefied petroleum gas (LPG) cars
  • Compressed natural gas (CNG) cars

How much does it cost to tax a car registered after 1st April 2017?

First-year road tax charge:

CO2 emissions (g/km) Petrol (TC48) and diesel cars (TC49) Alternative fuel cars (TC59)
0 £0 £0
1 - 50 £10 £0
51 - 75 £25 £15
76 - 90 £100 £90
91 - 100 £120 £110
101 - 110 £140 £130
111 - 130 £160 £150
131 - 150 £200 £190
151 - 170 £500 £490
171 - 190 £800 £790
191 - 225 £1,200 £1,190
226 - 255 £1,700 £1,690
Over 255 £2,000 £1,990

Annual road tax charge in subsequent years:

Electric vehicle Alternative fuel Petrol or diesel
£0 £130 £140

Annual road tax charge for vehicles over £40,000:

Fuel type Standard annual rate Additional rate  Total annual payment
Electric £0 £310 £310
Alternative £130 £310 £440
Petrol or diesel £140 £310 £450

Vehicles that cost over £40,000 will be charged an additional rate of £310 every year, from the second to the sixth year (the first-year charges are based on the same CO2 system as above). That £40,000 includes the cost of options but before any discounts you receive.

How do the 2017 car tax changes affect company car users?

There are no changes to the current BIK (Benefit-in-kind) car tax system for business users. That means low-emission company cars, such as the BMW 1 Series and BMW 3 Series, will still benefit from attractive BIK rates. With some exceptional BMW business offers available across the BMW range, you can enjoy a highly competitive lease deal and make the most of the current tax rates before they change. Contact us for information on these offers.

How much does it cost to tax a car made before April 2017?

If your car was registered before April 2017, you will be charged based purely on the fuel type it uses and its CO2 emissions.

Band CO2 Emissions Petrol & Diesel  Alternative Fuel
A Up to 100 £0 £0
B 101 to 110 £20 £10
C 111 to 120 £30 £20
D 121 to 130 £115 £105
E 131 to 140 £135 £125
F 141 to 150 £150 £140
G 151 to 165 £190 £180
H 166 to 175 £220 £210
I 176 to 185 £240 £230
J 186 to 200 £280 £270
K 201 to 225 £305 £295
L 226 to 255 £520 £490
M Over 255 £535 £505

How much does it cost to tax a car made before March 2001?

For cars registered before March 2001, road tax charges are based on engine size:

  • Engines smaller than 1,549cc will be charged at £150 a year
  • Engines larger than 1,549cc will be charged at £245 a year

What vehicles are road tax-exempt?

  • All vehicles powered purely by electricity
  • Any vehicle registered as being used by a disabled person
  • Historic cars – vehicles 40 years or older work on a rolling basis that starts on 1st April each year

Contact Spire to discuss the road tax charges for the specific BMW model you’re interested in. We’d be more than happy to help.

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To find out what the road tax changes mean for specific BMW models, please call or send us an enquiry