New VED road tax: the 2017 UK car tax changes explained

2017 is now in full swing, which means that the new VED (Vehicle Excise Duty) car tax rules are due to come into force in just a few weeks time. There are big changes coming as part of the new road tax system, including a complete revision of the vehicle tax bands that will affect anyone and everyone buying a new car from April 2017.

The biggest question new car buyers face in light of the VED tax changes is this: will you be better off buying a new car before or after the new car tax regime comes into force? Unfortunately, that answer depends on what type of new car you’re planning on buying and, most importantly, its CO2 emissions.

The new car tax changes were set in motion by George Osborne – former Chancellor of the Exchequer – during the days when David Cameron was Prime Minister. Under the current VED tax scheme, most new car buyers are paying very little (if any) road tax, which is costing the Treasury millions. The new road tax regulations mean that all new cars will face a significant hike in their car tax amount in the first year of registration depending on CO2 emissions, after that it’s a flat rate of £140 per year.

It’s also worth mentioning now that the 2017 car tax changes will not affect your current car, as long as you own it already or it will be registered to you before the 1st April 2017.