emissions-linked
The way in which Vehicle Excise Duty (VED) is structured is to
be shaken up, announced chancellor Alistair Darling in the 2008
Budget speech, with incentives for choosing less-emitting models
coming into force from 2009.
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From April 2010, cars emitting under 130g/km of CO2 will not pay
any VED at all in their first year of registration – but those
emitting the most will pay double duty.
The changes to VED announced are as follows:
- six new VED bands from 2009-10 – including a new top band (band
M) for most polluting cars that emit more than 255g CO2/km - reducing the standard rate, in 2009-10, for all new and
existing cars that emit 150g of CO2/km or less; and increasing the
rate on the most polluting cars to £425 - from 2010-11, extending the zero rate of VED, during first year
of ownership, to all new cars that emit 130g CO2/km or less - holding the first year rate for all new cars that emit between
131 to 160g CO2/km equal to the standard rate in 2010-11 - for the most polluting cars a first year rate of £950 in
2010-11
Darling asserted that the changes would leave the majority of
motorists “better or no worse off” in 2009.
David
Brennan, managing director of LeasePlan
said: “The new bands will encourage drivers into greener vehicles,
which we applaud. Meanwhile, the ‘showroom tax’ on vehicles
producing over 255g/km of CO2 will undoubtedly impact company car
policies around the UK. Employers will have to look more
closely at their fleet policies to see if employees should be
allowed to take these higher-emission vehicles at all – both
employer and employee may have to pay if they do.
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By GlobalData“Schemes designed to improve sustainability and reduce car
emissions are always welcome, and VED has clearly become the
government’s tool of choice in driving down vehicle CO2
levels. It is also good to see them using a carrot as well as
a stick – although there is still a big question mark over how many
vehicles are green enough to sit below the 130g/km threshold for a
zero rating on the first year’s VED.”
Motor Finance Issue: 41 – March 08
Published for the web: March 12 08 18:51
Last Updated: March 13 08 12:35
