The way vehicle tax is calculated will change for cars and some motor homes that are first registered with the DVLA from 1st April 2017.
The change won’t affect any vehicles registered before April 2017.
The rates explained:
For vehicles registered on or after 1st April 2017, the amount you pay for the first 12 months is based on CO2 emissions.
The rates are split into bands. The lower the emissions, the lower the vehicle tax.
After the first year*, the amount of tax that needs to be paid depends on the type of vehicle. The rates are:
£140 a year for petrol or diesel vehicles
£130 a year for alternative fuel vehicles(hybrids, bioethanol and Liquid Petroleum Gas - LPG)
£0 a year for vehicles with zero CO2 emissions (i.e. Electric vehicles)
*You can't make a 6-month payment for the first year.
New vehicles with a list price of more than £40,000:
If a vehicle has a list price (the published price before any discounts) of more than £40,000, the rate of tax is based on CO2 for the first year.
After the first year, the rate depends on the type of vehicle (petrol, diesel, alternative fuel or zero emissions) and an additional rate of £310 a year for the next 5 years.
Standard annual rate
Total annual payment
Petrol or diesel
After those 5 years, the vehicle will then be taxed at one of the standard rates (£140, £130, or £0, depending on vehicle type).
Here is our very own Angus Keith to explain in detail and give you an example of how this will impact you:
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