How drivers could be hit
New tax rates for vehicles registered after 1 April 2017, have now come into place. As a result, some new car owners are now liable to pay £520 a year in tax – while drivers of eco-friendly vehicles have also been hit even harder. Here are the details you’ll need…
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Cars registered on or after April 1 2017:
You will only be affected by this change if you bought a new car on or after 1st April, 2017. Tax rates for vehicles registered before this are calculated as they were before April.
Why has the change happened?
Now that a majority cars have become more efficient, the Chancellor has been hit in the pocket! So, despite moving to cleaner cars, the motorist is going to be hit for higher tax charges to make up for the cash lost by low-emissions vehicles that don’t attract any, or as much, road tax.
Does this mean I will have to pay more for a hybrid or low-emission car?
Yes – but only if you buy a vehicle first-registered after April 1, 2017. Buy a hybrid or low-emission car registered before April and you’ll enjoy huge savings in car tax payments – and help improve the environment at the same time. Here’s a quick example of how much a new car will cost
The following are examples of how much you’ll pay in VED (car tax) if you buy a new car now compared with one first-registered before April 2017. The prices include three-year ownership costs including the first-year charge.
NEW V NEARLY NEW
Fiat 500 0.9 TwinAir
Fuel: Petrol
Car tax for vehicle registered before April 2017: £0
Car tax for vehicle registered after April 1, 2017: £380
Change: +£380
A sub-100g/km city car such as the Fiat will now attract a first-year cost of £100 followed by a yearly bill of £100 for a Band D motor. Despite the car’s environmental credentials, post April owners will be hit by a £380 tax rise over 3 years.
Ford Fiesta 1.5 Duratorq TDCi Style
Fuel: Diesel
Car tax for vehicle registered before April 2017: £0
Car tax for vehicle registered after April 1, 2017: £400
Change: +£400
The Fiesta is the UK’s top-selling model and this 94g/km motor proved a big hit with its decent performance and low-emissions attracting £0 car tax. The post-April hit of £400 will make it far less attractive. Buy used for that £400 discount?
BMW 740d
Fuel diesel:
Car tax for vehicle registered before April 2017: £390
Car tax for vehicle registered after April 1, 2017: £1,100
Change: +£710
The luxurious BMW 740d was a pretty reasonable proposition for such a big car, but new rules will see it jump bands and take a hit from the new £40k premium. Buying nearly new will save that tax hike.
Examples of road tax savings if you bought a car first-registered before April 1, 2017
With the changes in road tax hitting new cars registered from April 1, 2017, buying a used car registered before this date could save you hundreds of pounds compared with three-year ownership costs for a new vehicle. Here are a few examples from Buyacar.co.uk.
| Car | List price | 3-year saving on April 1st car tax rates |
| Fiat 500 1.2 Pop | £11,350 | £380 |
| Audi A1 1.0 TFSI Sport | £16,845 | £400 |
| Seat Leon SC 1.4 EcoTSI 150 FR Technology | £21,310 | £380 |
| Mercedes A180d Sport Executive | £25,135 | £400 |
| Audi A4 Avant 2.0 TDI S line | £34,900 | £410 |
| Mercedes CLS 220d AMG Line 7G-Tronic | £47,495 | £840 |
| Land Rover Discovery Sport HSE Black 2.0 TD4 Auto | £41,720 | £710 |
What are the change in tax rates?
Anyone buying a brand-new car or motorhome registered since April 1, 2017, will pay the first year based on the vehicle’s CO2 emissions – however this first year payment will be based on heavily revised CO2 calculations and will likely see the charge double from current levels
The following year will see most vehicles move to the standard rate of tax which is £165 a year. However, zero-emissions vehicles – such as fully electric cars – will pay nothing.
New and current VED rates…
See what you could be paying here…
VED road tax charges for cars registered from April 2017
From April 2017, the amount you pay for VED (also known as road tax) will increase for most vehicle owners. Many motorists who buy low-emissions vehicles will find they have to pay VED for the first, time. The new VED charges are as follows.
| Emissions (g/CO2/km) | First year rate | Standard rate |
| 0 | £0 | £0 |
| 1-50 | £10 | £165 |
| 51-75 | £25 | £165 |
| 76-90 | £120 | £165 |
| 91-100 | £150 | £165 |
| 101-110 | £170 | £165 |
| 111-130 | £190 | £165 |
| 131-150 | £230 | £165 |
| 151-170 | £585 | £165 |
| 171-190 | £945 | £165 |
| 191-225 | £1420 | £165 |
| 226-255 | £2015 | £165 |
| over 255 | £2365 | £165 |
| Cars with a list price of more than £40,000 when new pay an additional rate of £355 per year on top of the standard rate, for five years | ||
VED rates for vehicles registered before April 1, 2017
By way of comparison to show the huge increase in charges, here are the rates that you’ll pay for cars first-registered before April 1, 2017…
| CO2 Emissions in g/km (tax band) | Annual rate |
| Up to 100 (A) | £0 |
| 101-110 (B) | £20 |
| 111-120 (C) | £30 |
| 121-130 (D) | £135 |
| 131-140 (E) | £165 |
| 141-150 (F) | £180 |
| 151-165 (G) | £220 |
| 166-175 (H) | £265 |
| 176-185 (I) | £290 |
| 186-200 (J) | £330 |
| 201-225 (K) | £360 |
| 226-255 (L) | £615 |
| Over 255 (M) | £630 |
Won’t this mean that new car sales will plummet?
Yes! This has been proved to be the case with April’s new car registrations falling for the first time since 2011. This could mean some good deals are there to be had as dealers attempt to shift stock – but these cars will also attract the new, higher rates of road tax. Conversely, nearly new cars are likely to attract a premium as these will escape the new VED rates.
See how new car sales fell in April compared with previous years.
There’s more bad news…
Anyone buying a car with a list price over £40,000 at first registration will pay a total of £520 a year after the first year. After five years the tax will revert to the standard rate of £165… so a hefty premium will be payable.
Will I pay more for my tax if I buy a new car?
Yes and no… depending on your choice of car – and it’s not the gas-guzzlers that’ll be hit hardest in reality. While some ‘big-car’ owners will be slapped with a £355 supplement and £165 rate adding up to £520 a year, it’s motorists buying super-efficient eco-friendly cars that will lose the most… despite – many might argue – attempting to do the right thing for the environment.
Post April 2017, anyone buying a car that is rated at 100g/km or lower will pay £680 in VED over five years, whereas owner of such cars under the pre-April system would pay no VED. As the changes only apply to vehicles registered after 1 April 2017, buying a nearly new car will make big savings.
However, owners who buy a reasonably prices sporty car rated at 226g/km above, will, according to Auto Express, be better off if they keep it for more than the standard three years. Retaining it for five years would save almost £600, while holding onto it for a decade would put an extra £2,500 in your pocket.
Will I pay more for my current car after April 2017?
No. Current tax bands won’t change for cars that are already registered. This will remain the case if they are sold. This could result in sub-100g/km cars attracting a hefty premium when sold on the used market as they will still be charged no VED. The same can be said for higher-polluting vehicles, too, which will also retain the same VED rates for examples registered before 1 April, 2017.
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