Government Changes That Will Affect Motorists - Tax, Scrappage, Insurance & More

Government Changes That Will Affect Motorists - Tax, Scrappage, Insurance & More

With laws around the automotive industry, car tax and car insurance constantly changing, it can be difficult for motorists to keep on top of updates. 2021 is no different and will see a variety of alterations in terms of legislation.

It’s essential for all road users to stay informed, which is why we have compiled this handy guide to cover some of the most key information. We’ll be covering 2021’s car tax changes, car insurance changes, scrappage schemes and any new car laws coming into place.

Car tax changes 2021

We’ll start with the one that nobody ever wants to hear about - car tax changes. Despite being an inevitable fact of life and essential to the economy, it’s still hard to get excited about the prospect of higher payments.

First of all, Vehicle Excise Duty (VED) will be increasing, which shouldn’t surprise anyone. Each year, VED has a tendency to increase just that little bit more, usually in line with inflation. The amount of VED you must pay is dependent on the Co2 emissions from your car. Last year, the test to determine exhaust emission rates was switched to WTLP (Worldwide Harmonized Light Test Procedure), providing more accurate results and, subsequently, higher tax.

Zero-emission vehicles, like EVs or Hydrogen-fuelled cars, will, of course, remain exempt.

April 2021 will see a change in Benefit in Kind tax for electric company cars; while the 0% tax break has unfortunately come to an end, the rate is increasing by a mere 1%, so drivers don’t need to panic too much about that. If this applies to you, make sure to read our complete guide to the April changes.

Clean Air Zones and Green License Plates

On the topic of low or zero-emission vehicles, it’s important to note the upcoming changes to several major UK cities. Many will be going ahead with proposed Clean Air or Low Emission Zones, which were previously put on hold due to Covid-19 restrictions.

Bristol and Bath will both see new Clean Air Zones introduced throughout the central areas of the city. Motorists who do not have a minimum of a Euro 6 diesel engine or a Euro 4 petrol engine will have to pay a fee to enter these zones. In Birmingham, a Low Emissions Zone will be introduced with the same requirements, and London’s current Clean Air Zone is being extended.

Green Numberplate

Oxford is expected to see a Zero Emissions Zone introduced, throughout which only zero-emission vehicles are permitted to drive. It is expected that Green License Plates, which can now be purchased by EV owners and other emission-free motorists, will continue to benefit from more proposed areas like this and may also benefit from cheaper parking in the future.

Read more: Green Number Plates Introduced on UK Roads

2021 Scrappage Schemes

While the government has no current plans to introduce scrappage schemes to incentivise new car buyers - and further promote the purchase of EVs - many manufacturers have scrappage schemes in place for 2021. Some of these include Toyota, Hyundai and Lexus. Most notably, petrol or diesel cars registered before 31st March 2021 can be traded in exchange for up to £4000 off a new Mazda model.

Car Insurance changes 2021

The most notable update in terms of car insurance relates to European travel in light of Brexit. Motorists wishing to take their vehicles abroad to certain European countries will need to ensure that they have a Green Card, which will prove that they have the limited level of insurance required to travel within that country. You will also need your license and a GB sticker on your car. Furthermore, if your trip is shorter than 12 months, you’ll be expected to take your V5C logbook.

Motor Insurance

If your car is hired or leased - which will, of course, apply to any existing or potential customers reading this blog - you will need a VE103 form. This will prove that you have permission to take the car outside of the UK.

Mobile Phone Penalties 2021

The government is cracking down further on laws surrounding mobile phone use on the road. All forms of usage are now banned, and motorists risk a £200 fine and 6 points on their license for holding their mobile phone while driving. This includes calling, texting, using social media, taking photos or videos, or playing games.

Read more: UK to Ban any use of Hand Held Mobile Phones While Driving

It’s very easy to get caught out when legislative changes come into place, so it’s crucial that all drivers familiarise themselves with these updates - no matter how relevant they may seem to you.

Meanwhile, if you are looking to lease a new vehicle, or perhaps capitalise on the ever-increasing benefits that come with EVs, take a look at our range of leasing deals or get in touch directly on 01273 433480, or request a callback at a time that suits you.

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