Car tax rates from April 2017

The new car tax system will divide vehicles registered on or after 01 April 2017 into one of three segments after its first year on the road – zero-emission, standard and premium.

Car tax for the first 12 months is covered by a first year rate (FYR) which is directly linked to the car’s CO2 emissions. The FYR uses the current VED system as its guide, with cars split into bands depending on what CO2 levels the emit. Note, however, that the CO2 ranges which define each band are different from the existing (pre-2017) car tax bands.

Unlike the current system, only zero-emission vehicles are eligible for zero VED. Cars emitting 1-50 g/km CO2 will be charged at £10 for the first year, cars emitting 51-75 g/km CO2 will be charged at £25 for the first year, with costs increasing incrementally over successive bands up to cars with CO2 emissions over 255 g/km CO2, which will cost £2,000 for the first 12 months to tax.

After a car’s first year, the three category system comes into place. The majority of cars will be charged at a flat standard rate (SR) of £140 no matter what their emissions. Zero-emission cars will be exempt from VED, while premium cars – defined as those that cost more than £40,000 – will be subject to a supplementary cost of £310 for the first five years of the standard rate.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/534511/ved-reform-briefing-for-motor-industry.pdf

12-month Vehicle Excise Duty rates for cars registered from 01 April 2017

Vehicle
CO2 emissions
First year rate
2017-2018
Standard rate* – Standard model
2017-2018
Standard rate* – Premium model**
2017-2018
0 g/km £0 £0 £310
1-50 g/km £10 £140 £450
51-75 g/km £25 £140 £450
76-90 g/km £100 £140 £450
91-100 g/km £120 £140 £450
101-110 g/km £140 £140 £450
111-130 g/km £160 £140 £450
131-150 g/km £200 £140 £450
151-170 g/km £500 £140 £450
171-190 g/km £800 £140 £450
191-225 g/km £1200 £140 £450
226-255 g/km £1700 £140 £450
Over 255 g/km £2000 £140 £450

*Standard rate applies from year two onwards. **Payable first five years of standard rate. Premium models are those costing £40,000 or more. Source: Budget 2015.

Source: Budget 2015.

*Note* It is unclear whether those cars that are zero-emission vehicles but cost more than £40,000 will be eligible for zero VED. Current information from the UK Government implies not and that, from the second year for five years, the £310 supplement would apply.