Vehicle Excise Duty

2 minute read  |  March 30, 2017

April. A time for fools, chocolate eggs and tax changes. With the implementation of the new Vehicle Excise Duty (VED) coming on April 1 2017, we’ve put together a rundown of the changes and what you need to know. If you’re short of time and would rather digest these changes in an infographic, then click here!

The tax changes were brought into effect by former Chancellor George Osborne and replace a system which has cost the Government millions with many motorists paying very little, if any, road tax. Under the new changes, motorists who purchase a vehicle after April 1 will see a significant increase in their road tax in the first year.

VED exemption

Perhaps the biggest cost for the Government under the current regulation is that so many cars are exempt from VED. Low emission and diesel vehicles currently fall under the tax exemption bracket, whereas from 1 April, only vehicles which produce no tailpipe emissions will be exempt, mainly electric and hydrogen varieties.

Polluters aren’t the only victims of the new regulations as cars costing more than £40,000 are subject to a five year supplementary charge of £310.

Why now?

The current road tax regime is a huge cost burden on the Exchequer with car makers working hard to produce low emission cars to save motorists money. Presently, a car with emissions of less than 100g/km pay no VED, while a vehicle would need to be in Band D (121-130g/km) before they see any significant road tax being charged.

With the implementation of the new rules, the Exchequer is due a bumper payday considering many consumers are still unconvinced about the benefits of electric or hydrogen vehicles.

If you’re thinking of buying a new car, do so before April to take advantage of the current savings. If you’re holding off for any reason, buy electric.

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