Policy paper

Vehicle Excise Duty

This tax information and impact note affects purchasers of brand new cars from 1 April 2017 onwards.



This measure reforms Vehicle Excise Duty (VED) for cars registered from 1 April 2017 onwards. First Year Rates of VED will vary according to the carbon dioxide (CO2) emissions of the vehicle. A flat Standard Rate (SR) of £140 will apply in all subsequent years, except for zero emission cars which will pay £0. Cars with a list price in excess of £40,000 will incur a supplement of £310 on their SR for the first 5 years in which a SR is paid. All cars registered before 1 April 2017 will remain in the current VED system, which will not change.

Published 8 July 2015