To drive a car on UK roads, the vehicle must have valid insurance and it must be taxed at the correct level at all times and even includes when you first buy the vehicle from the dealership, often the dealership will include the tax for you or it may be put in as an extra if you require.

For the last 10 years the level of tax has been based on your vehicle’s CO2 emissions and the cost of the vehicle. Brand new vehicles which currently emit less than 100g per km of CO2 are exempt from road tax. This has seen a rise in UK buyers purchasing vehicles which emit less than 100g per km as most manufacturers offer at least one tax free model. Some of the tax free vehicles include BMW 1 Series hatchback, Fiat 500 and Mini hatchbacks.

The tax industry was unveiled for an overhaul in 2015 following changes to the budget. Chancellor George Osbourne announced the current system will be scrapped in favour for a three tiered system in April 2017. He claimed the current system is not fair or sustainable as many people are not paying tax due to the vehicle being in its first year of ownership.

April 2017

The new regulations are due to come into force in April 2017. As mentioned above vehicle with less than 100g per k/m were exempt from road tax but from April 2017 only zero emission vehicles will be exempt, this leaves only electric vehicles. If you buy a car after April 2017 the first year of tax will be based on CO2 emissions however after this, you will be required to pay a flat rate of £140 per year.

I previously mentioned that the new system would be three tiered the three tiers are the following:

  • Zero VED: zero emissions road tax (Free – electric vehicles)
  • Standard VED: £140 Annual cost from second year of ownership. (First year will depend on CO2 emissions)
  • Premium VED: Brand new premium vehicles that exceed £40,000 will need to pay a staggering £450 a year

What about my current vehicle?

If you currently own a vehicle and don’t plan on buying a new vehicle in 2017 then there’s no need to worry! The new regulations only apply to new cars purchased after April 2017. Your current car will continue to cost the same as it has done in previous years.

Do these tax rules affect you? If they do and you don’t want to deal with them why not hire a vehicle from Car 2 U? We will cover everything for you! You can see our range of vehicles right here on our website.

Article originally posted here.