Land Rover
Beat the Road Tax increase
due in:
Vehicle Excise Duty increases from 1st April 2017
First year rates will range from £10 to £2000
Annual rate from year 2 onwards is £140 for ALL cars
£310 p/a supplement for ALL cars with a list price of £40,000+

Road Tax (VED) changes – here’s what you need to know

Starting from April 1, 2017, Vehicle Excise Duty (VED) is going to change. This is not an April Fool’s joke for drivers, so make sure you’re aware of the new rules.

Road tax rules now

As things stand, road tax is divided into ‘bands’ based on vehicle CO2 emissions levels. Drivers were rewarded for choosing lower-emission cars with a lower rate of tax.

With manufacturers showcasing better engineering in every new car, many of the latest models have attractively low VED rates. New cars have to reach band D, 121-130g/km, before significant road tax charges are applied.

The Government are now changing those low-emissions benefits for cars registered from 1st April 2017, to bring more tax money back to the Treasury as the current situation is deemed as unsustainable.

The most important changes

Your first year of ownership will now likely be the most expensive in terms of road tax. Currently, vehicles with CO2 rated up to 130g/km pay nothing in the first year but will pay anything up to £160 in year one from April 2017.

From the second year of ownership onwards, the CO2 scale becomes irrelevant and an annual flat rate of £140 will apply to most vehicles. Fewer vehicles will be completely exempt. At the moment, many low-emissions vehicles cost £0 in VED for at least the first year. The changes mean this will only apply to models with zero emissions – those powered fully by electricity or hydrogen.

If you buy a car that costs £40,000 or more, an additional supplement will apply. Expect to pay an extra £310 for the vehicle annually for the following five years.

Remember, these changes will only apply to new cars registered from 1st April 2017. There will be no change to the VED charges for vehicles registered before this date.Commercial Vehicles are also unaffected by the changes.

Value Your Vehicle

Get a free, no-obligation valuations of your vehicle, instantly

Will VED changes affect me?

Unless your current vehicle is the only one you’ll ever own, the changes will probably affect you in future. Drivers who buy a car registered from April 2017 onwards must abide by the new road tax laws.

It’s been suggested that as many as seven in ten motorists will end up paying more road tax as a result of the changes with buyers of smaller, more economical cars facing the biggest tax increase. For example, the Ford Fiesta with a 1.0-litre EcoBoost 100PS or 125 PS engine and CO2 emissions of 99g/km, is one of the most popular new cars in the UK. There is currently no road tax to pay in the first year or annually. Under the new laws, this model will cost drivers an extra £540 over four years.

However, if you choose a car with higher emissions, you might find you save money over time as a result of the changes. The Ford Mustang 5.0 V8 Fastback costing less than £40,000 for example, would save you £245 over four years of ownership and £995 over six years of ownership when new charges are in place.

The below table shows how the road tax changes will affect a selection of Ford cars. All cars listed have a RRP of under £40,000.

Existing VED Costs VED Costs from 1st April 2017


CO2 Year 1 Year 2/3 1st 3 Years Year 1 Year 2/3 1st 3 Years Difference
Fiesta 1.0T EcoBoost 125PS 99g/km Free Free Free £120 £140 £400 + £400
Focus 2.0TDCi 185PS 110g/km Free £20 £40 £140 £140 £420 + £380
Mondeo 2.0TDCi 210PS 124g/km Free £110 £220 £160 £140 £440 + £220
Kuga 2.0TDCi 180PS AWD 135g/km £130 £130 £390 £200 £140 £480 + £90
B-MAX 1.6 105PS Powershift 149g/km £145 £145 £435 £200 £140 £480 + £45
Edge 2.0TDCi 180PS AWD 152g/km £185 £185 £555 £500 £140 £780 + £225
Focus RS 2.3 EcoBoost 350PS 175g/km £300 £210 £720 £800 £140 £1,080 + £360
Mustang 5.0 V8 Fastback 299g/km £1,120 £515 £2,150 £2,000 £140 £2,280 + £130

The below table shows how the road tax change will affect Ford cars with RRP of over £40,000*.

Existing VED Costs VED Costs from 1st April 2017

RRP CO2 Year 1 Year 2/3 1st 3 Years
Year 1 Year 2/3 (including additional supplement of £310 per annum) 1st 3 Years (including additional supplement of £310 per annum) Difference
Edge Vignale 2.0TDCi 210PS Powershift AWD £41,165 152g/km £185 £185 £555 £500 £900 £1,400 + £845

*cars over £40,000 pay £310 supplement for 5 years

Click here to view Government site for VED changes

Find out more about road tax, VED, and new cars

Whenever you need advice on motoring – including changes to the law – get in touch with Gates Ford. We have dealerships in Stevenage, Epping, Harlow, St Albans, Stortford and Hertford.


VED - Frequently Asked Questions

All you need to know about VED changes

As of April 1, 2017, the way that Vehicle Excise Duty (VED) is calculated changed, affecting anyone who registers their new car after this date.

Why the change?

The government has revised Vehicle Excise Duty (VED) because, as a whole, the total amount of CO2 emissions produced in the UK has decreased. While this is, of course, a good thing for the environment, it’s not as welcomed by the Treasury, which is collecting less tax as a consequence.

What’s different about it?

Petrol and diesel-powered vehicles costing less than £40,000 (and registered after April 1, 2017) will be liable for a flat rate of £140. A charge of £130 will be applicable to hybrid vehicles (including HEV versions of the Focus, Mondeo and Vignale). The same fee will be collected every subsequent year.

If you register a car after April 1, 2017, and you paid more than £40,000 for it, an additional sum of £310 will be incurred, regardless of whether it produces emissions or not. This is effectively a five-year levy that covers years two to six of ownership.

Once the first year has elapsed, any zero-emission car that costs less than £40,000 will still continue to be tax-free.

Will this affect me?

Only if you registered a new vehicle after April 1, 2017; if you registered your car before this date, you will continue to be taxed as per the old (outgoing) system.

Anything else I should know?

It’s important to be aware that if you buy a car that falls beneath the £40,000 threshold, it still may be liable for the ‘premium’ tax if you add options that take it above that price. The levy is based upon the listed price of a car too, even if you receive a discount that takes it below £40,000.

Get in touch

If you have any questions about the new VED changes, please don’t hesitate to contact your nearest Gates Ford dealership by phone or in person – or via our website.