Vehicle Road Tax Changes

Vehicle Exercise Duty (VED) rates, also known as Road Tax, were increased on 1st April 2020, with Benefit-In-Kind on Company Car Tax also increased on 6th April 2020. The change in prices only affects new vehicles bought and registered after these dates.

The amount of VED you pay depends on many different factors including engine size, fuel type and CO2 emission levels of your vehicle. Electric vehicle owners are exempt from paying car road tax entirely due to their zero emissions and environmentally friendly credentials.

VED used to be calculated using the New European Driving Cycle test (NEDC) which was last updated in 1997, however with the advance in technology in cars the test has recently become outdated. The new method is called Worldwide Harmonised Light Vehicles Test Procecure (WLTP) and will provide a more realistic evaluation of a vehicle’s fuel consumption, driving range and CO2 emissions.

The result of this more accurate test is that the change in CO2 emissions will place some vehicles in a higher tax bracket to what they currently are. This in turn increases the cost of the vehicle's yearly road tax.

Check out the table below to see the updated tax bands for new vehicles purchased after 1st April 2020: