What the new VED Tax Law means

With 2017 in full swing, it won't be long until the new rules for VED (Vehicle Excise Duty) or road tax come into effect. Whilst this means big changes to the system, not many people are aware of what the changes mean for them, so we thought we'd explore everything you need to know.

What's changing?

Basically, the way that vehicle tax is calculated will change for cars from 1 April 2017. The new laws will see some of the most extensive changes to the UK’s road taxing structure. Any new car registered after April 1st will be subject to these new rules, and generally speaking, most cars will cost slightly more to tax after this date. The exception being cheaper electric cars with tax-free status. It's important to remember that the changes won’t affect any vehicles registered before April, but it's worth checking the vehicle tax rates to ensure you know exactly what you need to pay

An overview of the rates:

After April 1st, vehicle tax for the first year will be based on CO2 emissions. This figure will be a one off payment. However, after the first year, the amount of tax that needs to be paid will depend on the type of vehicle you're driving. The rates are:

  • £140 per year for petrol or diesel vehicles
  • £130 per year for alternative fuel vehicles (this includes hybrids, bioethanol and LPG)
  • £0 per year for vehicles with zero CO2 emissions

Should I wait until April 1st to buy a new car?

A lot of people are wondering when the most cost-effective time to change cars will be. At present, most new cars are paying little to no tax. However, the changes on April 1st will mean higher tax prices for all new cars during the first year of registration. After that, it'll be an annual flat rate of £140 for most cars. In short, the answer to the question ultimately depends on the car you're planning to buy and more importantly, the CO2 emissions.

If you're not sure what the new rates mean, come down to see us for a chat and we'll be able to find you a car that suits your budget and lifestyle.