Vehicle Tax is Changing

14.02.2017

The way Vehicle Tax (VED) is calculated is changing for vehicles registered from 1 April 2017.

The announced changes means that the first years vehicle tax will be calculated on the vehicle’s COemissions. The majority of vehicles will then move to a standard annual rate from the second year onwards.

If the vehicles list price is over £40,000 at first registration, you will pay an additional premium for five years after the end of the first years tax. After the five year period, only the standard rate will apply.

Vehicle types included in the new scheme:

CategoriesDefinition
Category MMotor vehicles with at least four wheels designed and constructed for the carriage of passengers.
Category M1Vehicles designed and constructed for the carriage of passengers and comprising of no more than eight seats in addition to the drivers seat.
Category M1 Special Purpose (M1SP)Passengers carrying vehicles which are designed and constructed for special purposes.
Category M1 (M1G)Designed for off road use and meeting designed criteria.

What will this mean for you?

  • New first year tax rates will be introduced from 1 April 2017. Vehicles registered before this date will not be affected.
  • All new vehicles registered on or after 1 April 2017 will be subject to a first year tax rate dependant on COemissions. Please see the table below for rates.
  • After the first year, the majority of vehicles move to the standard rate of vehicle tax which is £140 per year.
  • If the vehicle’s list price if over £40,000 at first registration you will incur a £310 premium on top of your standard tax rate. This will apply when you tax the vehicle for a second time and remain for five years before reverting back to the standard rate of £140 per year.
  • Electric vehicles exceeding £40,000 with zero emissions are also subject to the £310 premium (as above), and after five years the vehicle tax will revert back to £0. 
  • Alternative fuel vehicles such as hybrids, bi-ethanol and LPG will continue to receive a £10 reduction on vehicle tax rates. 

VED bands and rates for cars first registered on or after 1 April 2017

CO2 emissions (g/km)First year rateStandard rate*
0£0£0
1-50£10£140
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£1200£140
226-255£1700£140
Over 255 £2000£140

*Cars with a list price of over £40,000 when new pay an additional rate of £310 per year on top of the standard rate for five years.

We hope that you find this information helpful and understand how these changes could affect you.

Should you have any further questions about the new scheme, please do not hesitate to contact your local Vindis dealership and we will do our best to help.