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Vehicle Excise Duty (VED) - Changes from April 1st 2017

The amount we pay to tax our cars is changing. Vehicle Excise Duty (VED), or 'Road Tax' as it's commonly known, will change for new registrations from 1st April 2017. This will mean increased running costs. The good news - Any car registered before that date will remain on the current lower-cost tax scheme.

Under the new regulations the fee from year two will be £140 per year, unless the vehicle is zero emission, plus an extra premium of £310 per year on any vehicle with a final list price of  £40,000 or more. On a vehicle with a list price below £40,000 adding options which take a vehicle over that price will also attract the premium. Zero emission vehicles with a final list price of £40,000 or more will also attract the £310 premium.

In the majority of cases where tax is included for the term of a lease, these costs will be rolled into the lease price. In cases where tax is only included for the first year (eg Mercedes-Benz Operating Lease), customers need to be aware of the new charges for year two onwards.

If you arrange a new lease during the first three months and the car is registered in January, February or March, then the overall costs will be lower as those vehicles remain on the current tax scheme.

Please see the chart below detailing the new tax costs for registrations from 1st April 2017.

UK Vehicle Tax Rate Tables 2017

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Posted on 28th January 2017 at 2:49 PM

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