New diesel car VED rates are changing from April 1st

Contract Hire and Leasing
Posted Posted on Categories Business News

In the Autumn Budget, Chancellor Philip Hammond announced that all new diesel cars first registered from 1st April will face going up a VED band if they fail to meet the latest Euro 6 standards under real-world testing.

New cars will have to meet the real driving emissions (RDE) step 2 test that forms part of the current EU type approval process. This means new cars can pollute up to 1.5 times the current 80mg/km NOx limit under real-world driving if they are to avoid going up a tax band.

It is important to remember that the changes only apply to new diesel cars, not vans, and do not impact the subsequent £140 yearly fees all cars have to pay after the first year.  Cars registered before 1st April will continue to pay the old rates.

Any car which fails to meet the Euro 6 standards in real-world testing would move up a band, and as a result, pay anything from £15 to £560 more in first year rates.

Examples range from an additional £20 on a typical Ford Focus diesel to a £400 increase on a Land Rover Discovery.

The table below shows how the new rates will work.


*Cars with a value over £40,000 are also liable for the £140 VED rate from year two and will pay an additional annual ‘supplement’ of £310 for five years, a total of £450 a year. Once the five-year period is over, they revert to the £140 flat rate.

Fleet operators may wish to consider their fleet mix going forward in light of these changes, Days Fleet are on hand to assist with assessing your fleet policy and helping you to pick the right vehicles for your fleet going forward.