Call us: 020 8309 0011

McBrides Blog

Thinking of buying a new car? Don’t end up being an ‘April Fool’!

Article posted: 27th February 2017

If you are looking to buy a new car, you might want to consider doing it before 1 April 2017. Road Tax, or Vehicle Excise Duty (VED) as it is officially known, is changing for all vehicles newly registered on or after that date and there are some hefty increases planned!

For example, if you’re thinking of buying a new car with a list price of around £40,000 you might want to move quickly to beat the changes.

What are the changes?

  • Year 1 - VED will still be calculated based on a vehicle’s CO2 emissions, but only cars with 0g/km CO2 emissions – electric and hydrogen vehicles – will be exempt from paying the tax. Other cars will be subject to a variable first year rate from £10 for cars emitting 1-50g/km CO2, to £2,000 for those emitting over 255g/km CO2.
  • Year 2 - zero-emission cars remain exempt, however, other vehicles move to a standard £140 flat rate, regardless of CO2 emissions.
  • However, all new vehicles with an original list price of over £40,000 – including zero emission cars – will attract an additional rate of £310, payable each year for five years from the end of the first vehicle licence. That adds up to a whopping £1,550 of extra tax for these cars.

Click on the link for our factsheet – Buying a new car? – for fuller details of the changes and how they may affect you, including a full table of the VED tax bands.


The content of this document is intended for general guidance only and, where relevant, represents our understanding of current law and HM Revenue and Customs practice. Action should not be taken without seeking professional advice. No responsibility for loss by any person acting or refraining from action as a result of the material in this blog can be accepted and we cannot assume legal liability for any errors or omissions this blog may contain.

Back to blog listing

Budget creates unintended tax trap for Entrepreneurs’ Relief hopefuls

Entrepreneurs’ relief called into question

Philip Hammond makes U-Turn on Budget National Insurance rise for the self-employed