Vehicle Excise Duty

The changes announced by the Chancellor in the 2015 budget set out that Vehicle Excise Duty (VED) will change for registered vehicles from 1 April 2017. The first vehicle licence will be calculated on the vehicle’s CO2 emissions.

All vehicles registered before this date will not be affected.

Vehicles registered on or after 1 April 2017



For all vehicles first registered on or after 1 April 2017, the amount you pay for the first 12 months is based on CO2 emissions.

CO2 emissions (g/km) Petrol and diesel cars
0 £0
1 – 50 £10
51 – 75 £25
76 – 90 £100
91 – 100 £120
101 – 110 £140
111 – 130 £160
131 – 150 £200
151 – 170 £500
171 – 190 £800
191 – 225 £1,200
226 – 255 £1,700
Over 255 £2,000

The standard annual rate you pay each year after that depends on the type of fuel the vehicle uses.

Electric Vehicle Petrol and diesel
£0 £140

*Alternative fuel vehicles include hybrids, bi-ethanol and liquid petroleum gas.

Additional Rate for new vehicles that cost more than £40,000.

The first time you tax a vehicle on or after 1 April 2017 with a list price (the published price before any discounts) of more than £40,000 you will pay the rate based on CO2 emissions.

From the second vehicle licence taken out, you will pay the standard annual rate based on the fuel the vehicle uses and an additional rate of £310 a year for the next 5 years.

Fuel Type Standard annual rate Additional rate Total annual payment
Electric £0 £310 £310
Petrol or diesel £140 £310 £450

After 5 years you will pay the standard annual rate depending on what fuel your vehicle uses.

The information and data set out in this webpage are provided for general information only. For further information about these changes please visit Gov.uk. For individual professional advice please refer to your legal or tax advisor. All information was originally compiled on 4th January.