New VED Road Tax Bands for New Vehicles from 1st April 2017

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.

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;

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.

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]