Car tax changes explained

From April 1st 2017, the way vehicle tax is calculated in the UK changed. Read our article to find out more.

What's changed?

The first time your vehicle is taxed, the price you pay will be determined by its CO2 emissions.

After the first year, the tax rate will depend on the type of vehicle: 

  • Most petrol or diesel vehicles: £140 per year
  • Alternative fuel vehicles (hybrids, bioethanol and LPG): £130 per year
  • Vehicles with zero CO2 emissions: £0 per year

Am I affected?

The new vehicle tax rates apply to all vehicles first being registered with the DVLA from April 1st 2017 – any vehicles registered before April will not be affected.

Also, vehicles with zero CO2 emissions and costing less than £40,000 will be free to tax, under the new legislation.

If your vehicle has a list price of over £40,000

For the first year, the tax rate you’ll need to pay is based on the vehicle’s CO2 emissions.

After the first year, the tax rate will again depend on the type of vehicle it is (£140, £130 or £0 per year, as above).

In addition to this, all vehicles costing over £40,000 will also be subject to a further charge of £310 per year for the following five years.

After those five years are up, the vehicle will be taxed at one of the standard rates, depending on the vehicle type.

Did you know?

According to, six of 2017’s top 10 sellers are among the highest risers. Certain derivatives of the Vauxhall Astra, Ford Focus, Nissan Qashqai, Mercedes C-Class, Audi A3 and BMW 3-Series will command an extra tax bill of between £400 and £1,000 over three years.

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