VED Tax Change

In the lead up to each April, we all inevitably tense up in anticipation of the tax changes that are to be announced by the government. The 2020 tax announcement includes changes to vehicle excise duty (VED) that will have a lasting impact on drivers. The rules, regulations and tax rates are changing for all new cars and it’s critical that people understand the implications.

The rate of taxation has always depended on several factors, namely when your car was registered, how old it is, and how environmentally friendly the government considers it to be. The impact of motoring on our environment has been a real focus for the industry and the government in recent years and, as such, carbon dioxide emissions figures have become the focus of the VED calculations. Ultimately the government is looking to encourage drivers to move to pollution-neutral vehicles.

  • Tax calculated using a CO2 emission category based system
  • No tax of "zero emission" vehicles under £40,000
  • "Standard" car's taxed at £140 per year from the second year
  • "Premium" cars over £40,000 are taxed at £450 per year until its sixth year where this is reduced to £140 per year
2020 is the first year that VED will be calculated using WLTP (Worldwide Harmonised Light Vehicle Test Procedure) carbon dioxide emissions figures. The use of these new emission calculations is a big change but, as we’ve already said, the government's focus is a good one. These emissions tests will provide more accurate and measured CO2 results, which will be reflected in the tax rates


From 2020, the road tax system separates vehicles into thirteen categories of CO2 emissions. In their first year of registration, each vehicle will be tested and, based on their emissions, allocated to a category. That category - along with the vehicle type - will determine the taxation amount.

From the second year of registration onwards, the system is simplified a little. A three-band emissions system kicks in with zero emissions, standard and premium bands for vehicles. A ‘zero-emissions’ vehicle under the value of £40,000 will pay no tax at all - that’s the most simple one to remember.The tax for a ‘standard’ car will be £140 each year from year two going forward. A ‘premium’ band vehicle that emits CO2 and costs over £40,000 will cost £450 per year to tax, until its sixth year when it will reduce to £140 per year.

These changes can certainly seem daunting. What is important to remember is that it only affects newly registered cars; a car that has already been registered under the previous tax regime won’t be affected, although it is likely there will be some inflation on the rates applied. Here at Motorline, we want to keep our customers abreast of information like this as soon as we have it, so we have tried to simplify the changes as much as possible. But if you have any questions or would like any other guidance, get in touch with us. We’d be happy to help and advise you.

Tax Calculations based on WLTP

CO2 Emissions (g/km)Diesel cars (TC49) that meet the RDE2 standard and petrol cars (TC48)All other diesel cars (TC49Alternative fuel cars (TC59)
0 £0 £0 £0
1-50 £10 £25 £0
51-75 £25 £110 £15
76-90 £110 £130 £100
91-100 £130 £150 £120
101-110 £150 £170 £140
111-130 £170 £210 £160
131-150 £210 £530 £200
151-170 £530 £855 £520
171-190 £855 £1,280 £845
191-225 £1,280 £1,815 £1,270
226-255 £1,815 £2,135 £1,805
Over 255 £2,135 £2,135 £2,125