New changes to vehicle tax rates

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Changes to tax rates will be introduced from 1 April 2017

If you plan on buying a new car, make sure you know about the changes that will be taking place in 2017.

The way vehicle tax is determined will change for cars and some motor homes that are registered with the DVLA from 1 April 2017. It’s important to note that if your vehicle was registered before 1 April 2017 you will not be affected and you can find out what your vehicle tax rate by using gov.uk’s useful table.

To help you sort out what you need to know about the new tax rates, we’ve put together a list of important considerations.

What are the new tax rates?

To begin with, the first tax that you pay is based on CO2 emissions. An easy way to determine what the amount will be is by using this helpful calculator.

The second tax that is paid will depend on the type of vehicle. Here’s an easy way to remember how different vehicles are taxed:

  • £140 a year for normal petrol or diesel vehicles
  • £130 a year for vehicles that use alternative fuel (hybrids, bi-ethanol and LPG)
  • £0 if your vehicle has zero CO2 emissions

For new vehicles that have a list price (the published price before any discounts are offered price of over £40,000), you will then pay a tax rate based on CO2 emissions when you are taxed the first time. When the vehicle is taxed the second time, you will pay one of the new rates which depends on the type of vehicle as well as a rate of £310 per year for the next five years.

After those five years, the vehicle will then be taxed at one of the new rates again.

Remember, next time you are shopping for a new car to check with your dealer so you can have an idea of how much vehicle tax you’ll have to pay. Don’t forget that you can also apply for a discount on your vehicle tax if you claim certain benefits as well.

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