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The July 8 2015 revisions to the car tax system by George Osborne will continue to tax new vehicles by their CO2 emissions, but at new rates from 2017 onwards. The VED scheme was revised for 2017 to account for the growing number of tax-exempt cars being purchased.
The new VED bands will apply to all cars registered from 1 April 2017 onwards. A CO2 based rate will still mandate the first year fee – but only zero emissions vehicles will be exempt from the tax. Cars registered before April 1st 2017 will continue to be taxed under the old system.
 

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He also promised to “return this to the use for which it was originally intended”, by creating a new road fund. “Every single penny will go into the sustained investment our roads so badly need. Tax paid on people’s cars will be spent on the roads they drive on.”
 
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