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Vehicle Excise Duty is ChangingBack

DvlaAs announced in the 2015 Budget Statement, from the 1 April 2017 Vehicle Excise Duty (VED) will be reformed.  All vehicles registered from this date onwards will be subject to the new VED rates.

The new tax will ONLY affect brand new cars registered on or after 1 April 2017.  Tax rates for all vehicles registered before this date are not affected.

What does it mean for dealerships?

If you sell and deliver a brand new car which is registered on or after 1 April 2017, first year vehicle licence rates will be based on carbon dioxide (CO2) emissions of the vehicle.

For subsequent years a flat Standard Rate (SR) of £140 will apply unless the vehicle has zero emission, in this case the rate will be £0.

For vehicles with a list price over £40,000 at first registration, there will be a supplement of £310 per year in addition to the standard £140 VED cost i.e. a total cost of £450.   The additional charge will be effective for the first 5 years of the car’s life.  After 5 years the surcharge will be removed and the VED will revert back to the standard rate of £140 a year.

The list price of the vehicle is defined as the manufactures recommended retail price prior to dealer discounts.  Any factory-fit options, such as metallic point and alloy wheels will also be added to the recommended retail price to get the list price for VED.

Since last November the NFDA and car manufactures have worked with the DVLA to ensure the changes are introduced with the minimum disruption to customers and dealers

Posted by Sue Robinson on 29/04/2016