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In 2015 the Government announced that Vehicle Excise Duty (VED) would change from the 1st April 2017 on all new registrations. But, what does this mean to you? Below we are pleased to provide some information in relation to this change, but the important point to highlight is that if you buy a car before 1st April 2017 you will avoid the new tax increase and save money.

The Official Line

The way Vehicle Excise Duty is calculated is changing for vehicles registered from 1 April 2017. All vehicles registered before this date will not be affected.

  • The first year vehicle license will be calculated on the vehicle's CO2 emissions
  • In the second and subsequent years the 'Standard' rate of VED will no longer be related to CO2 but will be related to the list price of the vehicle
    • Vehicles with a 'list price' of £40,000 or less, the VED rate will be £140
    • Vehicles with a 'list price' over £40,000, an additional rate of £310 (totalling £450) which is due for 5 years from the end of the First Year License
    • After the additional rate expires the £450 will revert to £140, or whatever the prevailing rate is at that time
  • Cars with zero emissions will not pay the standard rate of vehicle tax
  • Any vehicle registered before 1 April 2017 will be exempt from the change

Why is this important?

If you are currently considering a brand-new vehicle and it is registered on or after 1 April 2017, after the first licence the majority of vehicles move to the standard rate of vehicle tax which is £140 a year.

If the vehicle price was over £40,000 at first registration, the customer will pay £450 a year, after the first vehicle license. This is made up of the £140 standard rate and £310 additional rate.

After 5 years, the vehicle tax will revert to the standard rate of £140 per year.

Here to help

The team at Specialist Cars Dacia is here to help, and if you would like further information on a purchase you are considering, please don't hesitate to get in touch. Similarly, if you would like to find out more about what you can save by registering a vehicle ahead of the change, feel free to get in touch.