An overhaul of UK car tax rules will increase the cost of motoring – but not if you’re buying a Nissan LEAF

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 as little as 2p a mile, buying a safe and reliable LEAF could save you hundreds of pounds in tax.

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

Read more: What Car?