New 2018 Diesel Road Tax and VED Guide

The government has decided to place a levy on diesel cars for the first time in history.

Chancellor of the Exchequer Philip Hammond has announced a rise in the taxes levied on new diesel cars in his Autumn Budget, as well as a new fund to boost the take-up of electric models.

THERE WILL BE NO ROAD TAX INCREASES ON PETROL CARS

 

New diesel tax bands from April 2018

CO2 emissions (g/km)

   

Current first year VED rates

   

First year VED rates for  Petrol Vehicles registered from April 2018 

 

First year VED rates for  Diesel vehicles registered from April 2018

0

   

£0

   

N/A

 

£0

1 - 50

   

£10

   

£10

 

£25

51 - 75

   

£25

   

£25

 

£105

76 - 90

   

£100

   

£105

 

£125

91 - 100

   

£120

   

£125

 

£145

101 - 110

   

£140

   

£145

 

£165

111 - 130

   

£160

   

£165

 

£205

131 - 150

   

£200

   

£205

 

£515

151 - 170

   

£500

   

£515

 

£830

171 - 190

   

£800

   

£830

 

£1240

191 - 225

   

£1,200

   

£1240

 

£1760

226 - 255

   

£1,700

   

£1760

 

£2070

New changes only apply to new diesel cars registered on or after the 1st April 2018, does not impact the current £140 yearly rate that all cars incur after the first 12 months. The above table display the new rates. Any car that does not meet the Euro 6 standard in real world testing will move up a band, and will cost between £15 to £500 more for the first year rate.        

Don’t forget the Premium Car Tax – Vehicles over £40,000

Don’t forget the five-year supplement for cars costing over £40,000, which is currently priced at £310 per year and starts in the second year of registration.

Bad News for Diesel Cars

The UK Government will now penalize diesel car drivers by adding a levy or a surplus to the tax rate. This has come as no surprise to many involved in the automotive industry as we’ve seen air quality suffer in recent years. Diesel car orders have decreased in recent months leading up to this announcement because of this anticipated tax rise on diesel cars.

New diesel car sales have suffered recently with a fall of 21.7% over the last 12 months compared to the year before and a fall of up to 30 % in recent months. Many new diesel cars are advertised as cleaner than ever, but it hasn’t managed to sway new car buyers, with more and more drivers opting for Eco petrol, hybrid and full electric vehicles instead.

Good News for Electric Cars

Philip Hammond announced a new £400m fund to increase growth in the UK's charging network for electric cars, as well as £100m in extra funding to support the current grants for hybrid and electric cars. We understand that this money is only for purely electric vehicles, meaning that plug-in and hybrid vehicles might not be supported by this grant when the current pot of money is depleted. "Our future vehicles will be driverless, but they'll be electric first, and that's a change that needs to come as soon as possible," announced Philip Hammond.

The current law surrounding benefit-in-kind tax will also be clarified, said Hammond, so that workers who charge their electric cars at work won't be charged more.

Hammond has also announced a big £40m boost to the development of driverless cars. This continues the Government’s intention to allow driverless cars onto UK roads from 2021. Officials estimate that the driverless car industry will be worth £28 billion to the economy by 2035 and that it could support 27,000 jobs.