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?
 
vehicle excise duty 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
 
 
 
 
Rachael Olukoju
Rachael Olukoju

Rachael is a diligent qualified accountant with audit experience and joined us from a top 15 accountancy firm. With a thirst for knowledge and personal development, Rachael continues to study towards further qualifications. She is a strong communicator who is passionate, goal-driven and leads by example. Rachael has significant experience in management and statutory accounts preparation and review alongside a strong understanding of reporting and completion against strict deadlines.