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How much will the new tax rate for deisels cost you?

As highlighted in our coverage of the Autumn Budget, the First-Year Rate of Vehicle Excise Duty (VED) is about to be raised for new diesel cars.

This means that vehicles registered after April 01st 2018 could now be liable to pay higher rates than their petrol equivalents.

However, in an effort to reward environmentally aware car choices, newer cleaner diesels - that’s any vehicle with a real world NOx emissions within 50% of the Euro 6 limit - will be exempt from the higher rate of tax.

Petrol drivers haven’t got away with it completely, as most VED rates have been increased in line with inflation. Although for most drivers, this should mean no more than an extra £10 per year.

Just in case you missed it at the time, you can download our full Budget guide for motorists, which includes a summary of the changes to VED here.

Of course, if you are a company car driver there's also the diesel tax supplement, which is going up to 4% (rather than the previous 3%) from the start of the new tax year on 6th April 2018.

And to make matters worse, because there are currently no new diesels which meet the upcoming RDE standards, there's no way you can avoid an increase in tax liability, unless of course you want to get rid of your diesel car altogether and opt for a nice clean fully electric vehicle instead.

Whether these increases are fair or not is a moot point. The use of taxation to drive manufacturer innovation and changes in buyer behaviour appears to be a government strategy which is set to be with us for some time to come.

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Posted on 19th February 2018 at 5:43 PM

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