Street with cars parked

Car tax changes: dealers must make sure they know the facts, says NFDA


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Many dealers are still not aware of the changes to Vehicle Excise Duty (VED) rates, which will affect all cars first registered from 1 April 2017 onwards, the National Franchised Dealers Association (NFDA) warned this week.

"This is a complex issue and it is vital that dealerships are able to clearly communicate the changes to consumers to avoid further confusion," said Sue Robinson, director of the NFDA.

Motorway on a sunny dayNew vehicles registered for the first time with the Driver and Vehicle Licensing Agency (DVLA) from 1 April will pay new first year licence rates based on revised carbon dioxide (CO2) emissions bands. The fees will almost double in some cases, the NFDA said.

In subsequent years a flat standard rate of £140 will apply to petrol and diesel cars, and £130 for hybrid and alternative fuel vehicles. Only zero-emission vehicles will be exempt from the the first year and standard rate.

Vehicles with a list price over £40,000 will attract an additional annual supplement of £310 for the first five years, regardless of their emissions.

The vehicles hit hardest by the new rules will be low-emission combustion-engined cars and hybrids, according to Whatcar.com. The website also noted that cars that were 'dirty' enough to be in the top tax band previously will actually work out cheaper after more than five years.

Motorists will not pay more for a car they already own, or for used cars registered before 1 April 2017. These will remain in the current VED system, which will not change, the Government said.

Further guidance on the new tax can be found at trusteddealers.co.uk.

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