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DVLA VED ReformBack

DvlaThe way car tax (vehicle excise duty) is calculated is changing

The 2015 Budget Statement announced new tax rates for vehicles registered after 1 April 2017.

So, what does this mean for the motorist and dealerships?

It will only affect you if you buy a brand new car on or after 1 April 2017.  Tax rates for all vehicles registered before this date are NOT affected.

How does it work?

If you buy a brand new car which is registered on or after 1 April 2017, you’ll pay for the first vehicle licence based on your vehicle’s CO2 emissions. The following vehicle licence will see the majority of vehicles move to the standard rate of vehicle tax which is £140 a year.

And there’s more…

If your car’s list price was over £40,000 at first registration, you’ll pay £450 a year after the first vehicle licence or on a change of registered keeper from the first owner. After 5 years the vehicle tax will revert to the standard rate of £140 a year.

What does this mean for the motor industry?

Since November 2015 we have worked with the NFDA and other motor industry parties to ensure the changes are introduced in a timely way, to minimise the effect on customers and dealers

We have undertaken a significant amount of insight with the motor industry to gather their thoughts and user needs. This will directly feed into the way we’ll design the service to accommodate the changes. We’ll carry out the changes to meet the legislative requirements while at the same time look at ways to improve our existing services and move away from using our legacy IT system.

To manage a change of this size we have introduced a number of forums to look at specific areas of interest e.g. policy and technology groups (which are already up and running). We’ll soon have a communication sub-group too.

All these groups will feed back their progress to a steering group which will include representatives from the NFDA and car manufacturers. They will be escalating any concerns and provide updates on progress. We’re already finding this approach helps to highlight issues and risks quicker – it is already allowing us to work out what we need to do. At the same time this process will ensure everyone involved has access to all the information they need.


Posted by Sue Robinson on 31/03/2016