Come April 1st, 2017 there will be changes to the current Road Tax or VED (Vehicle Excise Duty) system. Here’s what you need to know and how it will affect you.

What’s It All About?

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In 2015 the Chancellor set some extensive changes to the UK’s road tax structure, know as VED or Vehicle Excise Duty. From April 1st any new car registered will be affected by the changes.

Currently, the amount of road tax you pay is solely determined by the vehicles CO2 emissions, resulting in a number of cars paying low to £0 road tax, with the new structure this will no longer be the case, with a number of ‘low road tax’ vehicles incurring slightly increased duties.

The New Structure

Key Points

·  All new vehicles registered from 1st April 2017 will be affected by the changes in VED

·  Any vehicle registered before 1st April 2017 will not be affected

·  Only vehicles with zero CO2 emissions and list price less than £40,000 at time of registration will be exempt

·  The majority of new vehicles tax will cost a standard rate of £140 annually, after the first year of license

·  The first year’s licence will be calculated in accordance with the vehicles CO2 emissions

As with the current system, new cars are divided into 13 sections determined by their CO2 emissions, depending on what Emissions bracket your vehicle falls will determine your first year’s rate and once in the second’s year, a flat rate of £140 applies to the majority of cars. Those exempt being electronic cars with zero emissions, while those cars which have a road value at point of registration of £40,000+ will be required to pay an additional premium fee of £310 per year, for the first five years.

New VED system – for cars registered from 1st April 2017