A shake-up to the way UK road tax rates are calculated is coming into force next April.
Here’s what you need to know about the changes in how road tax – officially known as vehicle excise duty, or VED – is charged.
How will current road tax bands change in 2017? Will any cars still be exempt?
Cars registered after April 1, 2017, will pay a one-off tax charge for the first year, with rates decided by a significantly revised version of the current CO2-based tax band system.
From the second year onwards, the CO2 scale will no longer apply and a flat annual of £140 will take effect.
Only zero-emissions vehicles will get away with paying nothing at all. Currently, owners of eco-friendly cars with CO2 emissions of 100g/km or lower don’t have to pay any road tax at all. But in 2017, it will cost £400 over three years, £680 over five years and £1,380 over ten years if you buy a car with CO2 emissions of between 91-100g/km.
What if I buy a car that costs over £40,000?
Cars costing over £40k will also be liable for the £140 VED rate from year two. On top of that, they will need to fork out for an additional annual supplement of £310 for the first five years.
Even zero-emissions cars worth over £40k will have to pay the additional £310.
Once the five years is up, it will revert back to the £140 flat rate.
You’re in luck if you’re buying a car rated at 226g/km of CO2 or above
If, on the other hand, you’re aspiring to get a more reasonably-priced sporty model after the April 1, 2017, deadline, the new tax band system could save you almost £600 over 5 years – or nearly £2,500 if you keep it for 10 years (that’s again due to the £140 flat rate after the first year).
How will the road tax changes affect cars already registered?
Current road tax bands won’t change for cars registered before April 2017