First year Vehicle Excise Duty (VED) will be continue to be calculated on the vehicles CO2 emissions. However, the £0 VED rate will only apply to vehicles with zero CO2 emissions, rather than to any vehicle with CO2 emissions below 131g/km as today. CO2 emissions will continue to be split into 13 bands, but the breakpoints between bands have been amended – see below.
Standard rate VED (payable from year 2 onwards) will no longer be based on CO2 emissions bands. Instead, a flat rate of £140 per year will apply to all vehicles, the only exception being those with zero CO2 emissions which will continue to benefit from £0 VED.
The new rates and bands for the Vehicle Excise Duty system effective 1 April 2017 are set out in the tables below:
VED Bands PRIOR to 1 April 2017
| VED Band | CO2 emissions (g/km) | 2016/17 First year rate | 2016/17 Standard rate |
|---|---|---|---|
| A | Up to 100 | £0 | £0 |
| B | 101-110 | £0 | £20 |
| C | 111-120 | £0 | £30 |
| D | 121-130 | £0 | £110 |
| E | 131-140 | £130 | £130 |
| F | 141-150 | £145 | £145 |
| G | 151-165 | £185 | £185 |
| H | 166-175 | £300 | £210 |
| I | 176-185 | £355 | £230 |
| J | 186-200 | £500 | £270 |
| K | 201-225 | £650 | £295 |
| L | 226-255 | £885 | £500 |
| M | Over 255 | £1,120 | £515 |
New VED Bands FROM 1 April 2017
| VED Band | CO2 emissions (g/km) | 2016/17 First year rate | 2016/17 Standard rate |
|---|---|---|---|
| A | 0 | £0 | £0 |
| B | 1-50 | £10 | £140 |
| C | 51-75 | £25 | £140 |
| D | 76-90 | £100 | £140 |
| E | 91-100 | £120 | £140 |
| F | 101-110 | £140 | £140 |
| G | 111-130 | £160 | £140 |
| H | 131-150 | £200 | £140 |
| I | 151-170 | £500 | £140 |
| J | 171-190 | £800 | £140 |
| K | 191-225 | £1,200 | £140 |
| L | 226-255 | £1,700 | £140 |
| M | Over 255 | £2,000 | £140 |
*cars with a list price over £40,000 pay supplement of £310 per year for 5 years