For all the info on 2017 changes to VED car tax check out our guide – you may save a packet!
It's now 2017, which means the new rules for VED (Vehicle Excise Duty) or road tax are set to come into effect very soon. This means big changes to the system, including a switch up to new road tax bands which will affect anyone buying a new car from April 2017.
The big question for new car buyers is this: is it better to wait until April 1st, or is it more cost effective to change cars before the new regulations come into force? The answer depends entirely on your planned vehicle and most importantly its CO2 emissions.
The car tax changes were set in motion by former Chancellor of the Exchequer, George Osbourne, as a response to falling CO2 emissions levels from new cars in the UK. Under the current VED scheme, most new cars are paying little to no tax - costing the Treasury millions. The new road tax regulations will mean higher tax prices for all new cars in the first year of registration, and a flat rate of £140 for most cars thereafter.
The July 8 2015 revisions to the car tax system by George Osborne will continue to tax new vehicles by their CO2 emissions, but at new rates from 2017 onwards. The VED scheme was revised for 2017 to account for the growing number of tax-exempt cars being purchased.
The new VED bands will apply to all cars registered from 1 April 2017 onwards. A CO2 based rate will still mandate the first year fee – but only zero emissions vehicles will be exempt from the tax. Cars registered before April 1st 2017 will continue to be taxed under the old system.
After the first year, a flat fee of £140 applies for all vehicles not categorised as zero emissions. The revenue from the revised VED scheme will flow into a new road fund for road repairs and maintenance.
Buyers of cars with a list price above £40,000 will be required to pay an extra £310 every year for the first five years.
Current vehicle VED tax bands: table
First year rate
Up to 100 g/km
Over 255 g/km
VED tax bands: April 2017 onwards: table
VED car tax bands for cars first registered from 2017 onwards
Emissions (g/km of CO2)
First year rate
Cars above £40,000 pay £310 annual supplement for five years