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From 1st April 2017, the Government is changing the way that road tax (or Vehicle Excise Duty, to give it its proper title) rates are calculated for cars registered from that day forward. The changes will mean higher road tax prices for nearly all new cars in the year that they are registered and remain linked to the car's CO2 emissions. For the following years, the link between road tax and CO2 emissions is dropped in favour of a flat rate of £140 per year. We will explain these changes in more detail below.
Road tax in the first year is still calculated using the car's CO2 emissions, with the those producing the least CO2 paying the lowest levels of road tax, while those that produce the most CO2 paying the highest rates. The first year's road tax rate is included in the advertised 'On The Road Price' and is paid to the dealer when you purchase your car.
Except for cars that produce no CO2 in use (those running on electricity or hydrogen), the amount of road tax to be paid in the first year has increased for all cars - From a £10 rise for cars producing between 1g/km and 50g/km of CO2 right up to an £880 increase for cars that produce over 255g/km CO2.
Below is a table showing the first-year road tax rates under the current and new systems and how these will change.
| CO2 Emissions | Pre-April 2017 Rate | Post-April 2017 Rate | Change |
| 0g/km | £0 | £0 | £0 |
| 1-50g/km | £0 | £10 | +£10 |
| 51-75g/km | £0 | £25 | +£25 |
| 76-90g/km | £0 | £100 | +£100 |
| 91-100g/km | £0 | £120 | +£120 |
| 101-110g/km | £0 | £140 | +£140 |
| 111-130g/km | £0 | £160 | +£160 |
| 131-140g/km | £130 | £200 | +£70 |
| 141-150g/km | £145 | £200 | +£55 |
| 151-165g/km | £185 | £500 | +£315 |
| 166-170g/km | £300 | £500 | +£200 |
| 171-175g/km | £300 | £800 | +£500 |
| 176-185g/km | £355 | £800 | +£445 |
| 186-190g/km | £500 | £800 | +£300 |
| 191-200g/km | £500 | £1,200 | +£700 |
| 201-225g/km | £650 | £1,200 | +£550 |
| 226-255g/km | £885 | £1,700 | +£815 |
| Over 255g/km | £1,120 | £2,000 | +£880 |
The way the annual road tax rate is calculated is being changed completely. Under the current system, the rate you pay is determined by the CO2 emissions your car produces - For example, cars that produce 100g/km of CO2 or less pay no road tax at all, while those with cars emitting over 255g/km of CO2 paid £515 per year in road tax. From the 1st of April 2017, the link to to CO2 emissions ends and a flat rate of £140 per year is applied to all cars. Those buying cars with CO2 emissions of under 140g/km will pay more annually under the system, while those buying cars with CO2 emissions of over 141g/km will pay less every year with the new system.
If you are buying a car with a new list price of over £40,000 you will be subject to an additional supplement of £310 per year for the first five-years on top of the standard £140 charge.
Below is a table showing the annual road tax rates under the current and new systems and how these will change.
| CO2 Emissions | Pre-April 2017 Rate | Post-April 2017 Rate | Change |
| 0g/km | £0 | £0 | £0 |
| 1-100g/km | £0 | £140 | +£140 |
| 101-110g/km | £20 | £140 | +£120 |
| 111-120g/km | £30 | £140 | +£110 |
| 121-130g/km | £110 | £140 | +£30 |
| 131-140g/km | £130 | £140 | +£10 |
| 141-150g/km | £145 | £140 | -£5 |
| 151-165g/km | £185 | £140 | -£45 |
| 166-175g/km | £210 | £140 | -£70 |
| 176-185g/km | £230 | £140 | -£90 |
| 186-200g/km | £270 | £140 | -£130 |
| 201-225g/km | £295 | £140 | -£155 |
| 226-255g/km | £500 | £140 | -£360 |
| Over 255g/km | £515 | £140 | -£375 |
If you are looking to purchase a car with CO2 emissions of less that 141g/km of CO2, then we highly recommend you purchase a car for registration on or before 31st March 2017. f you are looking to buy a car that produces more than 141g/km of CO2
then things are a little more complicated as it depends how long you are
planning to keep the vehicle as to whether the reduced annual road tax
will offset the increase in the first year rate.
If you are in this situation
we recommend speaking to our sales teams who will be able to advise as
to whether you would be better off purchasing a car before or after the
changes come into force.
Here are examples of how the changes will effect some of our most popular models:
Thinking of changing your car in order to beat the tax changes?
If you own a car registered before 1st April 2017 the way your road tax is calculated is not going to change - it will still be based on your car's CO2 emissions. That is not to say the amount you pay in future will not change, the Government could choose to adjust the rates for each band, but for now you will continue to pay the same rate.
