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Everything you need to know about the road tax changes


Posted on 14 December 2016

The road tax system in Britain is undergoing a huge overhaul. One of the first steps was abolishing the little perforated paper disc you used to put in your windscreen, and now further changes to the Vehicle Excise Duty are afoot.

When will the changes take effect?

New Vehicle Excise Duty (VED) rates will be introduced for newly registered cars in April 2017.

How will this affect me?

Essentially this will affect everyone purchasing a car registered from April 2017 onwards.

All cars registered before 1st April 2017 will remain under the current VED system with no changes to the mobility component of Disability Living Allowance or Personal Independence Payments.

What does it actually mean?

All cars first registered from 1st April 2017 onwards will be affected. The first year rates of VED will vary depending upon the CO2 emissions of the vehicle. After the first year a Standard Rate (SR) of £140 will apply for all subsequent years, unless you purchase a zero emission car in which case both the first year rate and the subsequent rate will be £0 (unless the list price is over £40,000).

If your car has a list price of £40,000 or over it will attract a supplement of £310 to the Standard Rate, which will be payable for the first five years in which the SR is paid.

The rates are highlighted in the below table.

Emissions (g of CO2/KM) First year rate £ Standard rate £
0 0 0
0-50 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



* All cars over £40,000 will be subject to a £310 supplement to the SR for five years.

How does this relate to specific vehicles?

To help you understand the implications of the changes let’s take a look at 4 different vehicles and what the ongoing costs would be post April 2017, for a car registered after 1st April 2017.

  1. Nissan Leaf – List Price from £16,500

Type – Electric car – zero emissions

1st year VED - £0

SR                   - £0

  1. Vauxhall Astra Hatchback 1.6 CDTi Techline 110pS S/S ecoFlex – List price from £16,615

Type – Diesel – CO2 emissions – 95 g/km

1st year VED - £120

SR                   - £140


  1. Tesla Model S – List Price from £68,000

Type – Electric Car – zero emissions

1st year VED - £0

SR + Supp.    - £310 (£0 + £310) for 5 years.

  1. Mercedes Benz E Class E220d AMG 9G Tronic – List price from £41,000

Type – Diesel – CO2 Emissions – 112 g/km

1st year VED - £160

SR + Supp.    -  £450 (£140 + £310) for 5 years.


What are the implications?

Clearly this could impact your business if you run a fleet of cars, or if your car is run through your business. If you are planning to change your car in the New Year it may benefit you to plan slightly ahead of April to ensure your new car is not registered after 1st April 2017. Remember all cars registered before 1st April 2017 will still have the current VED applied to it.

You can find out more about how the above may impact on your company by contacting Smith Cooper

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