Finance Bill 2002: EXPLANATORY NOTE
CLAUSE 18: MOTORCYCLE (AND MOTORCYCLE TRADE LICENCES): RATES OF DUTY
SUMMARY
1. Clause 18 amends the structure of Vehicle Excise Duty for motorcycles. It replaces the existing three-band structure with four tax bands based on engine size. These changes are for licences taken out with effect from 1 May 2002.
DETAILS OF THE CLAUSE
2. Subsection (1) replaces the structure of tax rates for motorcycles set out in Schedule 1 to the Vehicle Excise and Registration Act with a new structure of four bands based on the engine size of the vehicles, as follows:
| Engine size | Annual rate of Vehicle Excise Duty (£) |
| Motorcycles not exceeding 150cc | 15 |
| Motorcycles exceeding 150cc but not exceeding 400cc | 30 |
| Motorcycles exceeding 400cc but not exceeding 600cc | 45 |
| Any other case | 60 |
3. Subsection (2) specifies that the rate of duty paid for a trade licence in respect of motorcycles shall be £60; and that the consequential penalties where a cheque is dishonoured in respect of such a payment shall calculated on the basis of that rate of duty.
4. Subsection (3) provides that the new rates will apply to licences taken out on or after 18 April 2002 for a period beginning on or after 1 May 2002.
5. Subsection (4) provides that the amendments in Subsection (2) to the basis for calculating penalties for dishonoured cheques in relation to trade licences shall take effect on or after 1 May 2002.