From 1st April 2017 the Government is making changes to the way Vehicle Excise Duty (VED) is calculated.
We’ve cut through the swathes of detailed information out there and have outlined below the key things motorists need to know, as well as the differences the new regulations will make. We hope it helps but please feel free to contact our teams across Dorset and Wiltshire if you’d like to find out more about what impact VED changes will have on new cars within the 16 vehicle manufacturer brands we represent.
First and foremost, all vehicles registered before 1st April are unaffected (the rules don’t apply retrospectively), so if you’ve already ordered your new car and are taking delivery of it before that date you’ll be unaffected.
Likewise, if you’ve owned your car for a number of years already, you won’t see any change in the rate you pay. The updated VED rules only apply to new cars.
In a nutshell, the changes will see a new car’s first year VED calculated on its CO2 emissions – so the lower the emissions, the lower the initial VED fee.
The majority of vehicles will then move to a standard annual rate of £140. So, put another way, for the first year the VED charge will vary depending upon the emissions levels of the car you’ve chosen; after that most cars will qualify for a flat rate VED of £140.
To give you an idea of the first year charges, cars with CO2 emissions between 1-50g/km will carry a VED of £10 for the first 12 months. Vehicles emitting 51-75g/km will be charged £25; those producing 76-90g/km at £100 and so on. The first year fee peaks at £2,000 for vehicles emitting more than 255g/km of CO2.
The charges are a little different if your new car costs more than £40,000. You’ll still be charged according to its emissions for the first year – as is the case for all cars. After that, the standard VED of £140 will apply but there’s an additional supplement of £310 for five years. So, for those five years the annual cost of the VED will be £450 (£140 plus £310). After that five year period has expired, the standard rate of £140 a year will apply.
Zero emissions cars (electric vehicles) will be exempt from any VED charge unless they exceed the £40,000 value threshold, in which case they too will be eligible for a higher rate of £310 for five years. After the five years, their VED will revert to zero.
We hope that clears up a few queries but if you are in any doubt or have any questions, please do not hesitate to contact a member of the Westover team.