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WARNING - NEW TAX RULES START IN:
Vehicle Excise Duty increases from 1st April
First year VED ranges from £10 to £2,000
VED for year 2 onwards is £140 for all cars
£310 p/a supplement for ALL cars with list price of £40.000

Everything You Need to Know About the 2017 Road Tax Changes

Vehicle Excise Duty (VED) is changing in 2017, with an expected 70 percent of drivers having to pay more.

Under the current system, the treasury was losing millions. Why? It’s because manufacturers have come a long way, producing lots of cars with less than 100g/km of CO2 emissions which have been free from annual road tax. Even cars with up to 120g/km of CO2 currently pay nothing in the first year and then up to £30 in the second year onwards. At the moment, drivers pay the first year based on the car’s CO2 emissions which changes in the second year, again based on the car’s eco-friendliness. For cars with up to 165g/km of CO2 emissions, the second year rate is either the same or more than the first year rate. Cars with over 165g/km of CO2 emissions have lower tax rates in the second year.

This is all changing on the 1st April, 2017 however, thanks to the former Chancellor of the Exchequer, George Osborne, as part of the government’s mission to reap the money currently being lost. New cars registered after that date will be subjected to the reformed levy.

Under the new system, drivers will pay the first year rate of VED based on the car’s CO2 emissions. Different bands determine how much drivers pay, and only cars with zero CO2 emissions will be exempt from annual road tax. In general, most cars will cost more to tax in the first year under the new bands. For example, cars with 131-140g/km CO2 figures used to cost £130 to tax in the first year, and from the 1st April, 2017, they will cost £200.

The most significant change is the second year rate which is a flat-rate fee of £140 for every car. Only those with no CO2 emissions such as electric, some hybrid and hydrogen models will be exempt. Your car dealership will be able to advise you on the cars that are free from VED. On top of this flat rate, cars that cost more than £40,000 will have an additional £310 to pay annually. This includes cars that have been reduced to less than £40,000 but were originally listed at that price, and those that cost less than £40,000 but the added extras take it over the price.

The way tax is transferred between current and new drivers is also changing. The new owner will have to re-tax the car when they buy it and the previous owner will receive a refund. If sellers don’t inform the DVLA of the changing hands, they will still be liable for any speeding and parking fines.

Only brand new cars registered after the 1st April, 2017 will be affected. We’re experiencing more people interested in new cars and we’re expecting a rush ahead of the changes to escape having to pay more. If you would like to buy a car under the current road tax system, you’ll have to buy it and register it quickly, so begin searching now to find great deals.

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How VED changes could affect you

The vast majority of UK car buyers who purchase a new vehicle after 1st April are therefore set to pay substantially more in VED. The table below shows how the new rates will affect levies on a variety of popular models:



EXISTING VED COSTS

VED COSTS FROM 1ST APRIL 2017


VEHICLE

CO2

YEAR 1

YEARS 2/3

1ST 3 YEARS

YEAR 1

YEARS 2/3

1ST 3 YEARS

DIFFERENCE

Ford Fiesta 1.0 s Zetec 5 door

99g/km

Free

Free

Free

£120

£140

£400

+ £400

Nissan Qashqai 1.5 dCI 110 N-Connecta

99g/km

Free

Free

Free

£120

£140

£400

+ £400

Renault Zoe Dynamique Nav Rapid Charge

0g/km

Free

Free

Free

Free

Free

Free

None

BMW 530d SE Auto*

134g/km

£130

£130

£390

£510

£450

£1,410

+ £1,020

Mitsubishi Outlander PHEV

42g/km

Free

Free

Free

£10

£140

£290

+ £290

Telsa Model S 70 kWh*

0g/km

Free

Free

Free

Free

£310

£620

+ £620

For our advice on the new VED charges and which cars are exempt, please call us, enquire online or come along to the showroom where one of the team will be able to help.