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As from April 2017 motorists will see an increase to the cost of their road tax as new Vehicle Excise Duty (VED) brands will be introduced.  These (VED) brands will be transformed into three categories – zero, standard and premium.

George Osborne said the standard charge of £140 would cover 95% of all cars reducing the costs from the average £166 that motorists currently pay.  This new system comes to a surprise for many as road tax charges will no longer be based on the CO2 emissions produced by each car.

The good news is that these charges will only affect motorists who buy a new car from 2017. So this means current drivers will not see an increase on tax for their current vehicles.

Tax prices for cars registered from 2017: table

Emissions (g/km of CO2) First year rate Standard rate
0 £0 £0
01-50 £10 £140
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
Cars above £40,000 pay £310 annual supplement for five years

The Chancellor said: “We will create a new roads fund from the end of this decade and every single penny raised in vehicle excise duty will go into that fund to pay for roads. The tax paid on people’s cars will be used on the roads they drive on. It’s a fairer tax system for motorists.”

Do you think this new tax system is fair? Let us know your thoughts.