From April 2017, the new VED (Vehicle Excise Duty or road tax as some know it) rules come into effect. This will have quite an impact if you are planning on buying a new car anytime soon.

Note that any vehicle you are currently driving and pre-registered before the 1st April 2017 won't be affected by these changes and you'll continue to pay the same standard rate as you are used to. Drivers can check their vehicle tax rate to make sure they know what they need to pay.

New April 2017 VED rates

Vehicles taxed after April 2017 will see their first-year tax based on CO2 emissions. After that, the amount of tax to pay depends on the type of vehicles you are driving.

Fueltype (s) Cost per year (£)
Petrol or diesel 140
AFV's (Hybrids, Plug-in hybrids, Bioethanol and LPG) 130
Electric, Hydrogen, any vehicle with zero CO2 emissions 0

Does your car have a list price of more than £40,000?

Any vehicle that has a list price (published price before discounts) of more than £40,000 will see a £310 supplement added to their VED rate for five years after the first year. For the first year, the rate of tax for these vehicles is based on CO2.

After the five years with the additional supplement, vehicles will be taxed at one of the standard rates shown in the table above.

Bear in mind that the £40,000 list price is the final list price that includes the cost of options too. If you specify a £200 option on a vehicle with a £39,900 list price, you will have to pay the premium fee.