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Changes To Road Tax

We take a look at the changes to road taxes for vehicles registered after 1 April 2017. Read this guide if you want to know how much your road tax is likely to cost, and what the changes mean for you.

On 8 July 2015, the government published a policy paper on the changes to the Vehicle Excise Duty (VED) rates. This was originally set out in ex-Chancellor George Osborne’s 2015 budget. Ultimately, this means changes to car tax/road tax rates. In this guide, we hope to make clear what is going to change for cars registered after 1 April 2017.

Here are the changes to the road tax;

First-Year Rate: These will vary depending on the CO2 Emissions of your chosen vehicle. Four new lower bands have been introduced for cars with low emissions. Only zero-emission vehicles will be £0.

Standard Rate (Every Year After First Year): There is a new flat rate of £140 for every car (including low emission vehicles). Only zero-emission cars will be £0.

Cars Worth £40,000+: If your car is worth £40,000 or more, there will be an additional £310 per year on top of your Standard Year Rate for the first five years.

Using the table below, you will be able to work out your First Year Rate (you’ll need to know the CO2 emissions of the car). After that, your Standard Rate will be £140 (unless you have a zero-emission vehicle). If your car is worth more than £40,000, you’ll need to add on an extra £310 for the first five years, after which you’ll go back to paying just the Standard Rate. Source: "Vehicle Tax (VED) is changing..." (PDF)

So, how much more expensive will your tax be if you decide to upgrade your current car? Overall, the average VED rate for the UK has been reduced from £166 to £140. So, in theory, it shouldn’t make too much of a change to what you’re currently paying on a similar car.

If your car is registered before 1 April 2017, you will continue to pay your car tax/road tax as normal, and these changes won’t affect you until you get a new car.

Hopefully, this guide will have answered any questions you have about the changes to road tax for cars registered after 1 April 2017. If not, please feel free to call us on 0151 728 4711. If you would like to view our latest Audi and Volkswagen contract hire offers please click here.

This guide is accurate as of 28 February 2017. This article does not constitute advice, it is for information purposes only. You should contact the finance company for personalised advice for your specific circumstances.

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