What does the new April 2017 VED Road Tax system mean for you?

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There has been quite a lot of confusion about the new VED (Vehicle Excise Duty) system that is set to come into force in April 2017. So, what does the new April 2017 VED Road Tax system mean for you?

The new regime will see vehicle road fund licence being based on CO2 emissions as well as list price. From April 2017, the Treasury will be claiming money on low emission vehicles that were previously exempt.

VED for all cars registered on (or after) April 1st 2017 – summary in brief

  • A year one rate based on CO2 emissions, is divided by three bands – zero emission, standard cars up to the value of £40k and premium cars over £40k
  • Zero emission cars will not have to pay VED, unless they are priced at over £40k
  • Zero emission cars priced at over £40k (‘premium’) will pay £310 for every one of the next five years after the opening ‘zero’ first-year rate
  • ‘Standard’ cars will all pay the first-year rate according to emissions and the standard rate of £140 will apply each year thereafter
  • Premium cars will pay the £310 supplement for the next five years, as well as paying the first-year rate according to emissions, making the VED £450 annually

Low emission vehicle VED charges

Drivers choosing hybrid and fuel efficient cars will feel the pinch, with many vehicles that would have attracted low VED under the previous system now costing a lot more to tax under the new regime.

High-end zero emission vehicles over the value of £40k, like the Tesla Model S for example, will attract the ‘premium’ tax, rather than being VED exempt.

Choosing your next lease vehicle to minimise VED costs from April 1st 2017

Obviously, if you are in the position to take on a lease vehicle that is registered before 1st April 2017, this is the best way to make savings as these cars will fall under the previous VED regime.

Rosedale Leasing have plenty of stock offers with vehicles that are ready to go now, and some that can be registered up until the end of March.

If you cannot register your next vehicle before April 1st 2017, take list price into consideration and be careful when adding optional extras; try not to take the OTRP over £40k if you would like to avoid the ‘premium’ VED tax.

Industry experts believe that the new VED system changes will not help the uptake of clean, green cars for benefit in kind tax (BIK) company vehicle drivers.

New VED bands from April 2017


CO2 emissions (g/km) First year rate Standard rate
0 £0 £0
0-50 £10 £140
51-75 £25 £140
76-90 £100 £140
91-100 £120 £140
101-110 £140 £140
110 -130 £160 £140
131-150 £200 £140
151-170 £500 £140
171-190 £800 £140
191-225 £1,200 £140
226-255 £1,700 £140
Over 255 £2,000 £140


If you would like to speak to any one of the Rosedale Leasing team about the new VED system, call 0845 148 3012, or browse our website to check out some of our fabulous stock vehicle leasing offers!

Warning! Our deals might get your wheels in a spin...

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