Published: March 9th, 2017 in Budget/Finance News
Back in 2015, then Chancellor of the Exchequer, George Osbourne announced measures to increase Vehicle Excise Duty (VED), more commonly known as "Road Tax" for new vehicles. Mr Osbourne stated " ‘Every penny of VED paid by the population's cars will now be used to improve the roads that people drive on", something which historically wasn't the case – Road Tax fell into the Chancellor's coffers along with other taxation and it was up to local authorities to maintain and improve Britain's road network.
Roll on to 2017, and the increases are almost upon us (1st April 2017). Many new (we must stress, this increase applies to new cars only) cars will be hit by 3 year VED increases of up to 933% although electric cars will continue to be exempt from any VED payment.
Q & A
What are the new VED bands for new cars from 1st April 2017?

Does this change to Road Tax affect me?
It will not affect any current car on the road, only new cars registered AFTER 1st April 2017. The only new cars exempt from VED after 1st April 2017 will be electric cars with 0g/km emissions. If your car was registered between 2001 and 1st April 2017 you will continue to pay the rates of VED then the table below continues to apply;
12-month Vehicle Excise Duty rates for cars registered since 1st March 2001*
VED Band | Vehicle CO2 emissions |
Standard rate 2016-2017 |
First year rate 2016-2017 |
Standard rate Green car 2016-2017 |
First year rate Green car 2016-2017 |
---|---|---|---|---|---|
A | Up to 100 g/km | £0 | £0 | £0 | £0 |
B | 101-110 g/km | £20 | £0 | £10 | £0 |
C | 111-120 g/km | £30 | £0 | £20 | £0 |
D | 121-130 g/km | £110 | £0 | £100 | £0 |
E | 131-140 g/km | £130 | £130 | £120 | £120 |
F | 141-150 g/km | £145 | £145 | £135 | £135 |
G | 151-165 g/km | £185 | £185 | £175 | £175 |
H | 166-175 g/km | £210 | £300 | £200 | £290 |
I | 176-185 g/km | £230 | £355 | £220 | £345 |
J | 186-200 g/km | £270 | £500 | £260 | £490 |
K* | 201-225 g/km | £295 | £650 | £285 | £640 |
L | 226-255 g/km | £500 | £885 | £490 | £875 |
M | Over 255 g/km | £515 | £1120 | £505 | £1110 |
What about Company Car Tax (CCT) Rates, will they change too?
The Company Car Tax Rates were announced in the March 2015 budget and the planned incremental increases (seen in the table below) until 2020 remain unchanged.
Company car tax is designed to encourage employers and company car drivers to choose cars with lower levels of CO2 emissions; incentives are offered both to the company and to the recipient of the vehicle to select low emission vehicles.
Company Car Tax BIK Rates 2015-20: HMRC Fuel Type D (diesel cars) and A (other cars)
Vehicle CO2 g/km |
2015-16 %BIK Rate |
2016-17 %BIK Rate |
2017-18 %BIK Rate |
2018-19 %BIK Rate |
2019-20 %BIK Rate |
|||||
---|---|---|---|---|---|---|---|---|---|---|
Petrol | Diesel | Petrol | Diesel | Petrol | Diesel | Petrol | Diesel | Petrol | Diesel | |
1-50 | 5 | 7 | 9 | 13 | 16 | |||||
51-75 | 9 | 11 | 13 | 16 | 19 | |||||
76-94 | 13 | 16 | 15 | 18 | 17 | 20 | 19 | 22 | 22 | 25 |
95-99 | 14 | 17 | 16 | 19 | 18 | 21 | 20 | 23 | 23 | 26 |
100-104 | 15 | 18 | 17 | 20 | 19 | 22 | 21 | 24 | 24 | 27 |
105-109 | 16 | 19 | 18 | 21 | 20 | 23 | 22 | 25 | 25 | 28 |
110-114 | 17 | 20 | 19 | 22 | 21 | 24 | 23 | 26 | 26 | 29 |
115-119 | 18 | 21 | 20 | 23 | 22 | 25 | 24 | 27 | 27 | 30 |
120-124 | 19 | 22 | 21 | 24 | 23 | 26 | 25 | 28 | 28 | 31 |
125-129 | 20 | 23 | 22 | 25 | 24 | 27 | 26 | 29 | 29 | 32 |
130-134 | 21 | 24 | 23 | 26 | 25 | 28 | 27 | 30 | 30 | 33 |
135-139 | 22 | 25 | 24 | 27 | 26 | 29 | 28 | 31 | 31 | 34 |
140-144 | 23 | 26 | 25 | 28 | 27 | 30 | 29 | 32 | 32 | 35 |
145-149 | 24 | 27 | 26 | 29 | 28 | 31 | 30 | 33 | 33 | 36 |
150-154 | 25 | 28 | 27 | 30 | 29 | 32 | 31 | 34 | 34 | 37 |
155-159 | 26 | 29 | 28 | 31 | 30 | 33 | 32 | 35 | 35 | 37 |
160-164 | 27 | 30 | 29 | 32 | 31 | 34 | 33 | 36 | 36 | 37 |
165-169 | 28 | 31 | 30 | 33 | 32 | 35 | 34 | 37 | 37 | 37 |
170-174 | 29 | 32 | 31 | 34 | 33 | 36 | 35 | 37 | 37 | 37 |
175-179 | 30 | 33 | 32 | 35 | 34 | 37 | 36 | 37 | 37 | 37 |
180-184 | 31 | 34 | 33 | 36 | 35 | 37 | 37 | 37 | 37 | 37 |
185-189 | 32 | 35 | 34 | 37 | 36 | 37 | 37 | 37 | 37 | 37 |
190-194 | 33 | 36 | 35 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
195-199 | 34 | 37 | 36 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
200-204 | 35 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
205-209 | 36 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
210-214 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
215-219 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
220-224 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
225-229 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
230 or above | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 | 37 |
[Source: NextGreenCar.com]
