As you may have already heard road tax is changing again! It’s definitely not the most exciting of topics, but one which is important to understand. From April 1st onward there will be a universal change in the way VED (vehicle excise duty) on cars is calculated.
Essentially the change in road tax is down the way that CO2 bands are being calculated. After April 1st fewer cars will come under the £0 band, which isn’t good news for motorists currently enjoying the exemption.
The First Year Rate (referred to as the first licence period) is still based on a graduated table of CO2 emissions, with cars falling into bands, from £0 for cars with zero emissions, all the way up to £2,000 for vehicles with CO2 emissions above 255g/km.
However, after the first year, cars will move into a second licence period known as the Standard Rate. All cars, other than those with zero CO2 emissions, are required to pay a yearly standard rate of £140.
There are some exceptions to this standard rate, more details of which can be found in this downloadable guide by ICL.
See new 2017 VED bands below:
|Emissions (g/km CO2)||First Year Rate||Standard Rate|
*After the first year, cars with a P11D value over £40,000 pay an annual supplement of £310 for five years.
How might this affect you?
When a vehicle is leased, the VED is included in the monthly payments.
If the vehicle is registered after 1 April 2017, the VED rate used to calculate the monthly payments may change (refer to the table above). The actual registration date depends on the dealership supplying the vehicle, but typically a vehicle is registered on the day it is delivered. If, due to manufacturer issues, a vehicle delivery scheduled for before 1 April 2017 is delayed beyond this date, the monthly payments may change.