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Road Tax is changing from April 1st 2017, but if you purchase your new vehicle before the end of March you can avoid the new additional costs.

If you’ve been thinking about buying a brand new car, then now might be the time to do so. From the 1st of April 2017, due to changes to the Vehicle Excise Duty which is also known as Road tax will be affecting the running costs of brand new cars.

If you’re planning on buying a brand new car, now might be the right time. As of 1st April 2017, changes to VED (Vehicle Excise Duty) otherwise known as road tax, will affect the running costs of brand-new cars. 

What are these changes?

Back in the year 2015, the government made an announcement stating that the way they charge for road tax would be changing from the 1st of April 2017. The current road tax is based on the C02 emissions that a vehicle produces, for example the higher the emissions the more road tax that would be required. There is one rate for the first year called the First Licence Rate and then another for the second and following years called the standard rate, the standard rate and first licence rate both increase with increased CO2 emissions. Beginning from April 2017, the first year rate will carry on being related to the CO2 emissions of the vehicle, though band will change and rates due will increase.

In the subsequent years, the standard rate won’t be related to CO2 any more but rather will be related to the list price of the vehicle. For those vehicles priced at £40,000 or less the rate will be £140 and for vehicles priced over that amount will have an additional £310 making a total of £450, which will be due 5 years from the end of the first year. After this additional rate expires the £450 will go back to whatever the established rate is at the time.

Will this affect my existing car?

You will only be affected by these changes if you purchase it after the 1st of April 2017; it only applies to vehicles registered on or after that date. The tax for cars purchased before that date will still be calculated using the CO2 emission system, which means that most cases will be better off. Additionally, the VED reform won’t apply to other types of vehicles.