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Manheim comments on VED changes in 2015 Summer Budget

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On Wednesday 8th July, the Chancellor of the Exchequer presented the Summer Budget to Parliament, which included significant changes to vehicle taxation from 2017. The government will introduce a new vehicle excise duty (VED) banding system for cars registered on or after 1st April 2017. The new system incorporates first year rates based on CO2 emissions, with a flat standard rate of £140 per year payable in subsequent years – except for zero-emission vehicles, for which no VED will be charged. In addition, cars with a list price above £40,000 will be subject to a supplement of £310 per year for the first 5 years in which the standard rate is paid.

Michael BuxtonFurther detail on the new rates and bands from 2017 can be found on the government’s website:

Michael Buxton, CEO of Manheim UK commented:

“As the VED changes announced by the Chancellor do not affect new vehicles until 2017, the changes should not impact the used vehicle market for the next two years. " Once the first new vehicles affected by the changes enter the used market, the £310 supplement for cars with a list price of £40,000 or more when new could be a significant consideration for trade and private buyers.
"Premium, low emissions models that currently incur annual VED of £20 or £30 could see that leap to £450 per year. In fact, the annual VED bill for any car costing over £40,000 with CO2 emissions up to 185g/km will at least double from 2017, compared to current rates. Given the nature of the premium vehicle market, it is likely that the annual £310 supplement – payable for five years after the first year of registration – will not just affect the car's first owner, but in many cases its second and third owners, too.”

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