Vehicle tax changes explained: What you need to know about the 2018 VED update

On April 1, the tax rules on new diesel cars are going to change. This only applies to cars registered from that date – those registered before April 1 will be unaffected.

All cars currently follow the standard first-year tax rules set in April 2017. This can vary from £0 for a zero-emissions electric car up to £2,000 for the worst-polluting vehicles.

Then, when the car is taxed for the second time, another standard rate is introduced.

Most petrol and diesel cars have a £140 standard rate, alternatively fuelled vehicles see a £130 rate, while zero emissions don’t incur any cost. The first-year rate is usually included in a new car’s on-the-road price.

You’ll have to be careful with the options box-ticking, too, if you want to avoid a higher rate of tax – even a car with a list price of under £40,000 will be eligible for the additional £310 if its price is pushed over £40,000 with any extras.

Then, when this five-year period is up, the vehicle will be taxed at the standard rate – £140, £130 or nothing.

The shake-up happening this April, which was announced in last year’s Autumn Budget, concerns new diesel cars. The revision adds a tier to the table of taxation of new diesels that don’t meet new Euro 6 emissions legislation and could see drivers having to pay up to £500 more.

It’s worth remembering, however, that these costs are included as the car’s on-the-road price and are designed to penalise cars that are the highest polluting. As with the rest of the rules, this only applies to diesel cars and not vans.

The amount of tax for older cars remains the same and is based on an emissions-related table introduced in 2001. Any car registered before March 1, 2001 qualifies for a different system of tax, and this one is refreshingly simple. If your car has an engine that’s above 1,549cc it’s £245 a year, whereas if it’s under 1,549cc it’ll cost £150 a year to tax.