Big Changes to Road Tax Prices

It isn’t long before the new VED (Vehicle Excise Duty) rules come into force, and it could have major implications if you are planning on buying a new van. The updated road tax measures will provide a big shake-up of the existing system, with the revision of the vehicle tax bands affecting everybody buying a new vehicle from April 2017 onwards.

The changes to the tax system were set in motion by former Chancellor of the Exchequer George Osborne, who was head of the Treasury when David Cameron was Prime Minister. Under the outgoing VED system most new car buyers were paying very little (if anything at all) in the way of road tax, which has been costing the government millions of pounds annually.

And if you’re worried about how your current van will be affected, fear not: as long as it was registered to you before 1st April 2017, the changes won’t apply!!

Unlike the current system, where low-emission petrol and diesel vehicles are tax exempt, the new VED system will only be free for vehicles with no tailpipe emissions – that means electric and hydrogen cars only. That’s not all though, as there’s a new five-year supplement to pay for cars costing more than £40,000, which will be priced at £310.

What are the 2017 Road Tax Changes in detail?

Cars registered after April 1st 2017 will pay a one-off tax charge for the first year, with rates decided by a heavily revised version of the current CO2 based tax band system.

The adjustments mean most buyers will see their first year tax charge virtually doubled, while only zero-emissions vehicles will get away with paying nothing at all.

From the second year onwards, the CO2 scale becomes irrelevant, as two flat rates will then be applied – a £0 (zero) VED rate for zero-emissions vehicles only, and a flat annual rate of £140 for all other cars.

While cars costing over £40,000 will also be liable for the £140 VED rate from year two, they will also be forced to pay an additional annual fee of £310 for the first five years!

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