New showroom tax hits UK buyers

Nic Cackett

Changes to the UK road tax system confirmed in Alastair Darling's 2010 budget come into effect today.

This could be good or bad news depending on which car you bought to sit on your driveway. The 13 VED bands have been slightly adjusted so cars emitting the least CO2 will be rewarded with savings, while those emitting the most will be subject to a tax rise at more than twice the rate of inflation.

For those about to buy a new car, the news is almost universally bad. Today marks the introduction of the new first-year VED rates – or the showroom tax as it's become known. This will mean a £950 levy on the most polluting (and therefore most fun) new cars.

We take a look at both systems in detail.