Vehicle Excise Duty (VED), formerly known as road tax, car tax and road fund license, is a levy which must be paid for most types of vehicles to be used or parked on public roads in the UK.

The guide below explains what VED is and what the 2018 rates are, as well as any new changes to the system. Any vehicles ordered with us and delivered on 1st April or after will be subject to the new tax rates.

Vehicle Excise Duty Explained

With VED, the driver pays a first year rate based on the CO2 and fuel type of their vehicle and then pay a standard flat rate of £140 in subsequent years, with a few exceptions:

  • Vehicles with zero emission (0g/km CO2) will be exempt from the first year road fund license. From Year 2 onwards, all vehicles have an increased VED Standard Rate of £140, with the exception of pure electric vehicles.
  • Vehicles with a P11D value of £40,000 or more will pay an additional £310 on top of their £140 standard rate, for five years before reverting to the standard rate.

As announced on Wednesday 22nd November 2017 in the Autumn Budget, a new Vehicle Excise Duty supplement will apply to new diesel cars first registered from 1st April 2018. This change will not affect diesel vans or next-generation diesel cars that meet emissions limits in real driving conditions (known as the Real Driving Emissions Step 2 standards).

Pendragon Vehicle Management offer a responsive and personable service along with the benefits that comes from being part of Europe’s Biggest Motor Group. We supply all brands of cars and vans, providing expert and impartial vehicle and funding advice that’s tailored to fit your business needs, complimented with best-in-class technology and industry leading fleet management. With over 30 years in the industry, we operate across a wide variety of business sectors, with services including Contract Hire and Daily and Flexi-rental. Talk to us for a free consultation by calling 01332 267 339 or by emailing us here.

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