Everything You Need to Know About the 2017 Road Tax Changes

From 1st April 2017, the biggest changes to Vehicle Excise Duty (commonly known as ‘road tax’) for many years will come into effect.

Instead of tax levies being calculated using a vehicle’s CO2 emissions, a flat-rate system will be imposed from year two onwards whereby almost all new car buyers will have to pay an annual sum of at least £140 – and often considerably more. The cost of ownership during year one is also set to soar, with the tax First Year Rate now as much as £2,000.

This will raise the cost of tax drastically for nearly all models, from city car buyers who would previously be exempt to the owners of executive cars and SUVs, who will often see a three- or fourfold increase in the amount they pay every year.


Fewer exemptions for small cars

As of the 1st April only zero-emissions cars, i.e. cars with all-electric or hydrogen propulsion, will be completely exempt from Tax.

Even plug-in hybrids, whose emissions figures are typically assessed as under 50g/km, will be obliged to pay £10 in their first year and £140 thereafter. The numerous owners of superminis with emissions of 99g/km or under will also be obliged to pay £120 in their first year of ownership, before moving to the flat rate of £140 in subsequent years. Most of these cars are currently exempt from tax.

Heavy initial costs for high-end and high-emissions models

The changes will also affect buyers of more expensive cars. From April, all vehicles with a list price of £40,000 will carry an extra ‘Premium’ annual fee of £310 between years 2-6 of ownership – regardless of emissions.

Although the £140 flat rate after the first year of ownership may be similar or even lower than what the drivers of higher-emissions vehicles pay now, the cost of tax has risen substantially for cars producing over 151g/km. New vehicles with a carbon output of over 255g/km will cost their owners £2,000 during the first year of ownership.


How Tax changes could affect you

The vast majority of UK car buyers who purchase a new vehicle after 1st April are therefore set to pay substantially more in tax. The table below shows how the new rates will affect levies on a variety of popular models:


Avoid the new rates

Drivers who purchase and register new cars before 1st April 2017 will be able to do so under the current Tax system – saving themselves hundreds or even thousands of pounds.

At Lipscomb, we’re currently offering a great selection of savings across the Volvo, Fiat, Abarth, Alfa Romeo and Jeep range, make it even more cost-effective to buy a new car before the approaching tax increases.

What about cars registered before April 1st 2017?

Tax band

CO2 Emissions (g/km)

2016/17 first year rate2

2016/17 standard rate1

2016/17 Total Amount Payable

A up to 100 0 0 0
B 101-110 0 £20 £20
C 111-120 0 £30 £30
D 121-130 0 £110 £110
E 131-140 £130 £130 £260
F 141-150 £145 £145 £290
G 151-165 £185 £185 £370
H 166-175 £300 £210 £510
I 176-185 £355 £230 £585
J 186-200 £500 £270 £770
K 201-225 £650 £295 £945
L 226-255 £885 £500 £1335
M over 255 £1120 £515 £1635

Rate 1 - 12 month non-direct debit rate and single 12 month payment direct debit rate. Alternative fuel car discounts: 2015/16 £10 all cars, 2016/17 £10 all cars . Rate 2 - First year rate or 'showroom tax' applies to new car purchases only. Rate reverts to standard rate' in subsequent years

New Tax system - for cars registered from 1st April 2017

Emissions (g/CO2/km)
First year rateStandard rate*
Total Amount Payable*
(excludes supplement charge if applicable)


0 £0 £0 £0
1-50 £10 £140 £150
51-75 £25 £140 £165
76-90 £100 £140 £240
91-100 £120 £140 £260
101-110 £140 £140 £280
111-130 £160 £140 £300
131-150 £200 £140 £340
151-170 £500 £140 £640
171-190 £800 £140 £1,200
191-225 £1,200 £140 £1,340
226-255 £1,700 £140 £1,840
Over 255 £2,000 £140 £2,140

*cars over £40,000 pay a £310 supplement every year for the first 5 years.

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