VED switches to WLTP rules today, BIK next week
01 April 2020
Author: Illya Verpraet
From today, VED for newly registered cars will be calculated based on their CO2 emissions on the WLTP cycle, rather than the old, more favourable NEDC cycle.
Company car tax, based on the BIK bands, will only make the switch next Monday, 6 April.
The WLTP cycle is a more realistic way of measuring CO2 emissions and in almost all cases, this means the resulting figure is higher. In other words, while the VED rates themselves stay the same, almost all cars will be more expensive to tax because they now officially emit more CO2. BIK rates have shifted somewhat, with a big break for zero-emissions vehicles - find all the details in our separate article.
One thing to note with the WLTP is that it dependent on the specific options configuration of a vehicle. The upshot is that those shiny 19in alloy wheels and premium sound system may cost a lot more than just the list price, as they increase weight and therefore CO2 emissions, and might just put a car into a higher BIK or VED band.
Vehicle data company Cap hpi compared cars' CO2 emissions for the old NEDC cycle and the new WLTP cycle and found that there are big differences between car classes in how much they are affected by the change.
On average, it found that CO2 values increased by 26g/km from 135 under NEDC to 161 under WLTP. The MPV or people carrier segment sees an increase of 33%, large executive cars see an increase of 30%, while SUVs are hit with an increase of 29%, on average.
As a result, MPVs will, on average, be 3.5% more expensive in company car tax, while superminis will be 3.2% more expensive. Luxury executive cars tend to see no increase, but only because they tended to be in the highest BIK band (37%) anyway.
Jonathan Clay, head of vehicle identification at Cap hpi said: "The combination of the introduction of WLTP and a new tax regime aimed at encouraging private drivers and fleets to make greener motoring choices has driven up costs across the board. But it's also clear that some sectors are more affected than others, which will undoubtedly drive a change in the shape of the UK car parc.
Up-to-date VED bands can be viewed on the Government's website, while the latest BIK rates can be found here.