Autumn Budget 2017: Diesel cars hit with VED increase

Thousands of diesel car buyers will have to pay higher VED (also known as car tax) from 1 April 2018. The change was announced by Chancellor of the Exchequer, Philip Hammond, as part of the 2017 Autumn Budget

Under the new tax rules, diesels that do not meet new Real Driving Emissions (RDE) rules will have their first-year tax rate calculated as if they were in the VED band above. 

For the average diesel car in the UK this means an increase of £40 a year.

This will not apply to next-generation clean diesels – those which are certified as meeting emissions limits in real driving conditions, known as RDE.

>>Road Tax rates for 2018/2019

It's presumed that the majority of new Euro6 diesels on sale have not been tested to the RDE system, which was introduced in September to complement the Worldwide Harmonised Light Vehicles Test Procedure (WLTP). The reason for this is because the RDE test isn't mandatory for new cars until 2021. 

RDE is effectively a 90-minute on-road assessment, with equipment attached to the car to measure exhaust gases to ensure they comply with Euro6 emission standards. 

For most car buyers, the increase will be in the tens of pounds rather than the hundreds, with only the most-polluting of cars facing significant tax hikes. The Treasury claims that the new tax rules will raise over £125 million for improving air quality in towns and cities across the UK. VED for vans will remain unchanged.

>> What is the Real Driving Emissions test?

A rise in the existing Company Car Tax diesel supplement - from three to four per cent - will also come into effect from 6 April 2018. This will also apply only to diesel cars which do not meet the Real Driving Emissions standards.