New VED charges: What you need to know

On the 1st April 2017, Vehicle Excise Duty (VED) is changing. From that date, you will have to pay the first year of tax based on your car’s CO2 emissions and then a flat rate of £140 thereafter. Here is an overview of what the new changes with important information you need to know.

 

Current VED (before 1st April 2017)

There is currently a tiered system in place for working out the amount of road tax every driver has to pay. The amount is based on CO2 emissions and the figure changes in the second year onwards. For cars with up to 165g/km of CO2, the second year figure is either a bit more or equal. For cars over that amount, the first year tends to be higher than the payments there after. 

The amount you have to pay for each band is increasing. Previously, cars with less than 100g/km of CO2 emissions paid nothing for the first few years and those up to 120g/km paid £30 from the second year onwards.


New VED (from 1st April 2017)

After the 1st April 2017, the rate you pay for the first year is based on a tiered system by your car’s CO2 emissions. Only cars with zero CO2 emissions will be free from VED. This includes electric-powered and some hybrid cars, along with hydrogen models. Cars with more than zero and up to 100g/km of CO2 will have to pay up to £120 in the first year and £140 thereafter. Previously, these cars were free from annual road tax. Cars that cost over £40,000 will pay an additional £310 a year.


Why are these changes happening?

With the latest technology reducing car’s CO2 emissions significantly, many drivers were paying little to no VED. This was costing the treasury millions of pounds, so the Chancellor of the Exchequer reviewed the system.


What cars are affected?

Only cars registered after 1st April will be affected. Most cars will cost more to tax so it’s likely that people will rush to buy new cars before the changes come into place.


Selling your car under the new system

Transferring the remaining car tax to a new owner is also changing. From 1st April onwards, the new buyer has to re-tax the car and as soon as the DVLA received the notification about the change of owner, you will receive a refund. It’s essential that you let the DVLA know if a car is changing owner immediately because you could face a £1,000 fine and still be liable for any speeding or parking fines.


What should you do?

While there is an expected rush for people to buy cars now before the tax changes occur, there can be long waiting lists so a new car could arrive later than the 1st April. If you are looking to buy a new car, it’s worth contacting your nearest dealerships to see if it is likely that you could get a car in advance of this date.

You can rest assured that after the 1st April, we will let every driver know how much their CO2 emissions and VED are ahead of the sale.

Contact us in branch today for advice on saving money ahead of the changes.