Effective 1 April 2017, vehicle tax rates or Vehicle Excise Duty (VED) are set to change.
The first 12 months will be based on CO2 emissions irrespective of fuel type, the bands span from 0 to over 255 carbon emissions with costs ranging from £0 to £2,000 (see the table below). The change in VED rates only apply to brand new vehicles registered from the 1st of April 2017, meaning that any car you bought/buy before then is unaffected.
In addition to the new Co2 banding structure explained above, you could occur some other costs.
All new vehicles that are priced £40,000+ are subject to an additional £310 tax from year 2 to 6. If your vehicle is of zero-emissions and priced over £40,000, you will only be charged the additional rate of £310.
Vehicles priced over £40,000 and 1+ Co2 emissions will be charged the standard rate of £140 plus the additional rate of £310 with a total of £450.
If on the 2nd of April 2017 you decided to purchase a brand new petrol car at the price of £27,995 with 144/km, your vehicle will fit in the 131-150/km tax bracket. You will pay £200 in your first year then £140 in the years succeeding. Having owned your car for 6 years, you'll pay a total of £900.
If you purchase a vehicle on the 2nd of April at the price of £45,000 and its carbon emission figure is 226g/km. The First Year Rate is, therefore, £1,700, the Standard Rate is £140 and – from year 2 to 6 inclusive – it is subject to the £310 Additional Rate too. Total cost is £3,950 assuming there is no change to the rates.
|Carbon Emissions (G/KM)||First Year Rates (Petrol & Diesel)||Standard Rates|
|51 - 75||£25||£140|
|76 - 90||£100||£140|
|91 - 100||£120||£140|
|101 - 110||£140||£140|
|111 - 130||£160||£140|
|131 - 150||£200||£140|
|151 - 170||£500||£140|
|171 - 190||£800||£140|
|191 - 225||£1,200||£140|
|226 - 255||£1,700||£140|