New Vehicle Tax Rates

Added: 27 January 2017

The vehicle tax reform announced by the Chancellor in the 2015 budget, identified that from the 1st April 2017, the first vehicle licence will be calculated on the vehicle's CO2 emissions. 

The current standard first registration fee of £55 will still apply and is unchanged. 

The majority of vehicles will then move to a standard rate of £140 annually from the second licence. Cars from with Zero emissions will not pay the standard rate of vehicle tax. However, if a car's list price is over £40,000 at first registration, the customer will pay the additional rate for five years after the end of the first licence. 

How it works:

  • Tax rates for vehicles registered before 1st April 2017 will not be affected by this charge. 
  • Only M1, M1SP and M1G type approved vehicles are impacted by these changes (definitions of vehicles click here)
  • All Vehicles with zero emissions will be exempt from standard rate of vehicle tax. All other vehicles will pay a standard rate of £310 will be payable each year for 5 years from the end of the first vehicle licence. After the 5 year period the standard rate will apply.
  • Zero emission vehicles will have a standard rate of £0 but if the list price is over £40,000 they will pay the additional rate of £310 a year for 5 years. 
  • Multi stage build M1SP and M1G vehicles without a CO2 emissions figure shown as part of the final type approval will continue to be taxed as PLG.
What this will mean for you: 

  • The rate will be based on the CO2 emissions and the list price of the vehicle (inclusive of options). 
  • the list price of vehicles subject to the scheme must be provided when the vehicle is first registered. Therefore cost options can increase the List Price of the vehicle to over £40,000 and increase the Standard (2nd year) VED rate from £140 to £450 for 5 years.
  • This list price will be provided by the manufacturer or dealer/retailer and reflect the vehicle list price on the day before it is first registered and taxed. 
  • For new M1, M1SP and M1G imported/Kit built vehicles, the list price or notional price is provided by the person/importer registering the vehicle. 
  • If the vehicle list price was over £40,000 at first registration , the customer will pay £450 a year, after the first vehicle licence. This is made up of the £140 standard rate and £310 additional rate. After five years the vehicle tax will revert to the standard rate of £140 per year.*
  • Vehicles with a list price exceeding £40,000 with zero emissions (including electric) will pay the additional rate of £310 a year for a 5 year period, after the first licence. After the 5 year period these vehicles will pay zero vehicle tax.

 
 
Co2 emissions (g/km) First year rate Standard rate*
0 £0 £0
0-50 £10 £140
51-75 £25 £140
76-90 £100 £140
91-100 £120 £140
101-110 £140 £140
111-130 £160 £140
131-150 £200 £140
151-170 £500 £140
171-190 £800 £140
191-225 £1200 £140
226-255 £1700 £140
Over 255 £2000 £140


 
 

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