2018 VED Tax Changes - How will it affect you?

2018 VED Tax Changes: Explained

April 2017 saw a major overhaul of the UK’s vehicle excise duty (VED) system, otherwise known as ‘road tax’. Many new vehicles that would previously have been exempt were no longer so, and higher charges were raised on vehicles with greater CO2 emissions.

Further changes are set to be implemented from April 2018. Here, we’ll explain what happened in 2017 and what changes are in the pipeline this year.

First year charges:

CO2 emissions (g/km)	Petrol and diesel cars	Alternative fuel cars
0	£0	£0
1 - 50	£10	£0
51 - 75	£25	£15
76 - 90	£100	£90
91 - 100	£120	£110
101 - 110	£140	£130
111 - 130	£160	£150
131 - 150	£200	£190
151 - 170	£500	£490
171 - 190	£800	£790
191 - 225	£1,200	£1,190
226 - 255	£1,700	£1,690
Over 255	£2,000	£1,990

Annual rates, after first year:

Zero emissions cars	£0
All emissions; petrol and diesel cars	£140
All emissions; alternative fuel cars	£130

However, things are slightly more complex if the list price of your vehicle is more than £40,000. Regardless of your emissions, you’ll receive a £310 additional charge for the first five years of the car’s life after the first year, on top of the flat rate that all drivers must pay.

Annual rates, after first year, for vehicles with a list price over £40,000:

Zero emissions cars	For five years, after the first:	£310
	Thereafter:	£0
All emissions; petrol and diesel cars	For five years, after the first:	£450
	Thereafter:	£140
All emissions; alternative fuel cars	For five years, after the first:	£440
	Thereafter:	£130

What changes are being introduced in 2018?

You may have seen in the news that diesel cars are under the spotlight. With many diesel models found to be posting harmful NOx emissions scores, the government has moved to discourage the worst offenders, targeting those that don’t meet the latest Euro 6 Real Driving Emissions (RDE) Step 2 test. This means new diesel cars face being notched up a band in their first-year tax if they release over 50% more than the 80mg/km NOx limit under real-world driving conditions. 

2018 changes to first year VED rate for diesel cars not meeting Euro 6 RDE standards:

CO2 emissions (g/km)	Current first year VED rates for diesel cars	New April 2018 VED rates for diesel cars not meeting Euro 6 RDE standard
0	£0	N/A
1 - 50	£10	£25
51 - 75	£25	£100
76 - 90	£100	£120
91 - 100	£120	£140
101 - 110	£140	£160
111 - 130	£160	£200
131 - 150	£200	£500
151 - 170	£500	£800
171 - 190	£800	£1,200
191 - 225	£1,200	£1,700
226 - 255	£1,700	£2,000
Over 255	£2,000	TBC

It’s important to remember that any changes to VED are non-retrospective, and only apply depending on when your car was first registered. If your car was on the road before 1st April 2017, none of these changes will apply. And if your car is relatively new, or you’re due to pick up your keys before 1st April 2018, the changes to VED for heavily-NOx-emitting diesel cars won’t apply either. But if you’re considering purchasing a new diesel vehicle in the coming months, these changes will likely affect you, and you may want to bear them in mind when choosing your model.