Important Changes to Road-Tax from 1st April 2017

The way Vehicle Excise Duty is calculated is changing for some vehicles registered after 1st April 2017

Current Rules

Currently, car tax is determined solely by CO2 emissions, and the car value is not taken into account. So, cars that emit up to 100g/km of CO2 enjoy no tax, and cars that emit between 101-120g/km of CO2 attract only small amounts of tax. Cars that emit 121g/km of CO2 or more pay significant amounts.

What's Changing

New cars will still be divided into 13 different CO2 bands. If you are currently exempt from road tax, or Vehicle Excise Duty (VED) because your car emits less than 100 grams per kilometre (g/km) of carbon dioxide (CO2), this will change come April. The amount of VED you pay will still be based partly on your car's CO2 emissions, however the list price at vehicle registration will affect what you pay after the first year.

  • For all new cars registered after April 1st 2017, car owners will pay a standard VED rate of £140 vehicle tax, EXCEPT for zero emission vehicles who will enjoy their first year tax free.
  • After the first year, ALL vehicles will pay the standard flat fee of £140, INCLUDING owners of zero emissions vehicles.
  • If the value (list price at registration) of your vehicle is over £40,000 then there is an addition "premium fee" of £310 VED to pay for 5 years.
  • After the five years, zero emissions vehicles can go back to enjoying a tax free status, however all other vehicles will continue to pay the standard rate of £140.

TABLE: VED bands and rates for cars first registered on or after 1 April 2017

CO2 emissions (g/km) First year rate Standard rate*
0 £0 £0
1 - 50 £10 £140
51 - 75 £25 £140
76 - 90 £100 £140
91 - 100 £120 £140
101 - 110 £140 £140
111 - 130 £160 £140
131 - 150 £200 £140
151 - 170 £500 £140
171 - 190 £800 £140
191 - 225 £1200 £140
226 - 255 £1700 £140
Over 255 £2000 £140

What about cars that are already registered?

If you buy your car before 1 April 2017, you won't be affected by these changes because they only apply to cars registered on or after that date. Your car tax will continue to be calculated using the old system of CO2 emissions.

More information can be found at the GOV.UK website.



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