The way we pay VED (annual road tax) in the UK will change to a flat rate system after the first year. These changes will affect new cars registered on or after the 1st April.
In 2017, during the first year of driving a car, VED will be calculated based on CO2 emissions. However, the rates are changing. As of the 1st April, rather than paying zero VED on cars that emit less than 100g/km of CO2 emissions, only the cars that have exactly zero g/km figures will be exempt. These cars include electric and hydrogen cars.
After the first year, there will be a flat rate of £140 for all cars. There’s also a tax of £310 to pay annually for five years for cars that cost more than £40,000.
All cars will have to be sold with information about how much it will cost to tax. It’s recommended that you check this first to see if you can afford the car that you would like to buy.
The calculations are based on your car’s CO2 emissions, starting at £10 for those cars with between 0 – 50g/km figures. After the first year, you will have to pay £140 annually.
VED car tax bands: April 2017 Onwards
|Emissions (g/CO2/km)||First year rate||Standard rate|
Cars above £40,000 pay £310 annual supplement for five years
These changes will affect most drivers looking to buy a new car after the 1st April 2017. Cars that are registered before that date will not be affected.
It may be advised to buy a new car before the 1st April, if you have the finances in place to do so. Keep your eye out for great offers on cars during the next few weeks and SMC ahead of the changes.