new 3008 suv excise duty

Have you heard that vehicle excise duty (commonly known as road tax) will soon be revised? From 1st April, the government will be changing the vehicle tax bands, which mean significant changes to the current road tax bands, depending on the CO2 emissions of the car you’re buying.

The new system means new car owners will have to pay up to £400* more in road tax over a typical three-year ownership period. The good news is that if you take delivery of a new Peugeot before 1st April, these charges won’t apply.

new 3008 suv excise duty changes

What are the main changes I need to be aware of?
For new cars first registered from 1st April 2017 onwards, First Year Rates of VED will be different according to the CO2 emissions of the vehicle. After the first year, an annual Standard Rate of £140 applies to all petrol/diesel cars regardless of their emissions. For zero emission vehicles this annual Standard Rate will be £0.

Are there any extra payments for certain vehicles?
Cars with a list price** above £40,000 will attract a supplement of £310 for each of the 5 years which follow the First Year (i.e. the initial 12 month period following the date of first registration). This is the case even where the car is a zero-emissions vehicle. After the 5-year period, the Standard Rate only will then apply to these cars.

Do these changes apply to cars registered before 1st April 2017?
No, these road tax changes will not apply retrospectively, so if your vehicle was registered before 1 April 2017 these changes won’t affect you. Only new cars registered on or after 1st April 2017 are affected by the VED changes. Cars registered prior to 1st April 2017 will remain in the current VED system, which will not change.

Does this apply to vans too?
No, the Vehicle Excise Duty for vans (LCVs) will not change.

* Amount quoted shows the cost saving for Peugeot 208 1.6L BlueHDi 120 S&S over a 3 year period, £120 in the first year and £280 in the following 2 years.

** List price includes base vehicle, trim, paint, options, delivery and VAT.

The tables below show the current VED rates effective until 31st March 2017 and the revised VED rates effective from 1st April 2017.

CURRENT VED RATES

For petrol and diesel cars registered on or before 31st March 2017

VED Band

CO2 Emissions

Annual rate

First year rate

A

Up to 100 g/km

£0

£0

B

101-110 g/km

£20

£0

C

111-120 g/km

£30

£0

D

121-130 g/km

£110

£0

E

131-140 g/km

£130

£130

F

141-150 g/km

£145

£145

G

151-165 g/km

£185

£185

H

166-175 g/km

£210

£300

I

176-185 g/km

£230

£355

J

186-200 g/km

£270

£500

K

201-225 g/km

£295

£650

L

226-255 g/km

£500

£885

M

Over 255 g/km

£515

£1,120

NEW VED RATES

For petrol and diesel cars registered from 1st April 2017

Emissions (g/CO2/km)

First year rate

Standard Rate^

0 g/km

£0

£0

1-50 g/km

£10

£140

51-75 g/km

£25

£140

76-90 g/km

£100

£140

91-100 g/km

£120

£140

101-110 g/km

£140

£140

111-130 g/km

£160

£140

131-150 g/km

£200

£140

151-170 g/km

£500

£140

171-190 g/km

£800

£140

191-225 g/km

£1,200

£140

226-255 g/km

£1,700

£140

over 255 g/km

£2,000

£140

^Cars with a list price** above £40,000 will attract a supplement of £310 for each of the 5 years which follow the First Year (i.e. the initial 12 month period following the date of first registration).

WHY IS VEHICLE EXCISE DUTY CHANGING?

The current (pre-1st April 2017) VED rates are based on CO2 bands and were introduced in 2001, back when average UK new car emissions were 178g CO2/km. The Band A threshold of 100g CO2/km below which cars pay no VED was introduced in 2003. Since then, in order to meet EU emissions targets, average new car emissions have fallen to 125g CO2/km. This means that an increasingly large number of ordinary cars now fall into the zero-or lower-rated VED bands, creating what the government are calling “a sustainability challenge” and weakening the environmental credentials of VED.

This is set to continue as auto manufacturers like Peugeot produce more cars that meet future EU targets of 95g CO2/km, by 2020. Additionally, the pre-April 2017 system results in significant unfairness as owners of newer cars pay little or no VED while owners of older cars generally pay higher rates.

The reformed VED system from April 2017 retains and strengthens the CO2-based First Year Rates to incentivise motorists to select the very cleanest cars, which is good news for the environment, whilst moving to a flat Standard Rate in order to make the tax fairer, simpler and more sustainable for everyone.

It also introduces a supplement of £310 in addition to the Standard Rate for cars with a list price** (not including VED) over £40,000, for each of the 5 years which follow the First Year (i.e. the initial 12 month period following the date of first registration, even where the car has zero-emissions), to ensure those who can afford the most expensive cars make a fairer contribution.

**List price includes base vehicle, trim, paint, options, delivery and VAT.