'Road tax' is changing

‘Road tax’ is commonly used as an incorrect term in place of Vehicle Excise Duty (VED). VED is based upon CO₂ produced by a vehicle into the environment; the greater the emissions, the greater the VED rate.

As of 1^st April 2017, the government is introducing new VED regulations. Vehicles which are registered on or after 1^st April 2017 will be affected by the new rules:

• In the first year of registration of a qualifying vehicle, there will be a one-off tax payment based upon the CO₂ emissions of the vehicle (new rates below).
• After the first year of registration, a standard flat rate of £140 per year will be applied to all vehicles.
• If you purchase a car for £40,000 or more, after the first year there will be an additional £310 premium tax for 5 years (so a total of £450 per year). It will then revert to the standard £140 per year rate.
• However, if your vehicle is electric or hydrogen-powered (zero CO₂ emissions), there will be a rate of £0.

It would be worthwhile considering the VED reform if you are planning on purchasing a new vehicle, it could prove financially beneficial in the long-term.

If your car was registered to you before 1^st April 2017, the VED changes will not apply to your vehicle.