Vehicle Excise Duty 2017. All change. Again.

Changes to vehicle excise duty in 2017 mean motorists who choose to drive gas guzzlers and who currently pay up to £500 per year, will save over £350 per year on the charge, which is commonly referred to as road tax. The most polluting cars will pay £375 less compared to this year's rates.

In yet another, and arguably retrograde, reform of vehicle excise duty (VED), every car first registered from 1 April 2017 onward, irrespective of the amount of pollution it produces, will pay a flat standard rate.

First year rates will continue to vary according to the carbon dioxide emissions of the vehicle, but a flat standard Rate (SR) of £140 will apply in all subsequent years.

For example, the driver of a one-year-old Land Rover 3.0 SDV6 with CO₂ emissions of over 225 g/km will pay only £140 per year - a dramatic reduction of over £350 per year on current rates.

Vehicle excise duty: Cars first registered after 1 April 2017

*cars over £40,000 pay £310 supplement for 5 years

Vehicle Excise Duty - why the change?

The current VED structure based on CO₂ bands was introduced in 2001 when the average CO₂ emissions for new cars sold in Britain was 178 g/km. The band A threshold of 100 g/km, below which cars paid no VED was introduced in 2003. Since then, to meet EU emissions targets average new car emissions have fallen to 125 g/km. This is set to continue as manufacturers meet further EU targets of 95 g/km set for 2020.

Additionally, the 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 reforms are moving VED to a flat standard rate in a bid to make the tax 'fairer, simpler and sustainable'.

If anyone is able to explain why it would not be significantly fairer, simpler, more sustainable and cheaper to simply add another tax to petrol and diesel, please leave a comment below.

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