Promoted: The tax factor - new VED rules explained

It’s no joke: on April 1, the system for taxing new cars in the UK, known as Vehicle Excise Duty (VED), is being radically overhauled (click here for details). The revamp will make it more expensive to run certain types of low-emissions cars – but the Nissan LEAF, the world’s best-selling electric car, will remain exempt from tax.

If you’re confused by the changes, or uncertain of what they mean if you’re considering buying a new car, here’s a quick guide.

How car tax works now

The amount of VED you currently pay is based on your car’s CO2 emissions. There are 13 VED bands: vehicles that emit between 0 and 130g/km of CO2 (think electric vehicles and certain hybrids) don’t pay any VED in their first year. After that, vehicles that emit 101-120g/km of CO2 have to pay between £10 and £30. The duty jumps from there, to at least £100 for cars that emit 121g/km of CO2 or more.

What’s changing

From April 1, only vehicles that produce no emissions while driving, such as the Nissan LEAF, will be exempt from VED in year one. Vehicles that produce 1-50 g/km of CO2 pay £10; those that emit 51-75 g/km pay £25. VED then leaps to £100 for vehicles that emit 76-90 g/km. From year two on, CO2-producing vehicles costing less than £40,000 pay an annual rate of £140 – with a £310 premium for cars that cost more than £40,000.

Zero emissions, zero tax

Cars that produce 0g/km of CO2 and cost less than £40,000 will remain exempt from VED for their lifetime. The fully-equipped, five-seat electric Nissan LEAF falls into that category – and it’s also exempt from congestion charges. So as well as fuel costs of just 2p a mile*, buying a safe and reliable LEAF could save you hundreds of pounds in tax.

Cutting the cost of motoring

Nissan and What Car? are committed to cutting the cost of motoring. What Car?’s True MPG fuel economy tests are conducted in a laboratory to ensure repeatability, and based on a real-world route that takes in town, motorway and rural driving. The results are far more reflective of real-world performance than official government fuel economy figures, and that means you can make an informed decision when choosing your next car.

When it comes to fuel efficiency, the British-built Nissan LEAF remains ahead of the pack – because it uses no combustible fuel at all.

For more information on What Car? True MPG, click here.For more information on the all-electric Nissan LEAF, click here.

• 2p per mile is based on (i) overnight electricity costs (British Gas Standard Tariff unit rates paying by Direct Debit as at 1 November 2016, assuming seven hours charging at night rate and one hour on day rate), and (ii) a range of up to 155 miles (LEAF 30kWh) per full charge (assuming 95% efficiency) based on European Driving Cycle. Actual consumption and range may vary due to driving style, road condition, air conditioning use and other factors outside our control.