17 March 1998

NEW VEHICLE EXCISE DUTY SYSTEM TO PROTECT THE ENVIRONMENT

                                                 HM TREASURY 16
                                                  17 March 1998

An ambitious reform of vehicle excise duty, to encourage
cleaner vehicles and protect the environment, was announced
today by Chancellor Gordon Brown.

The Government will:

- introduce next year a new system of graduated Vehicle Excise
Duty(VED) for cars, with a new lower 100 pound rate for the
least polluting cars. The Government will consult on these
proposals later in the year;

- freeze VED rates for all vehicles in the meantime;

- reduce VED rates for lorries and buses meeting low emissions
standards by up to 500 pounds from 1 January 1999;

- review the system for setting VED rates for lorries to
ensure that the environmental damage caused by lorries is
reflected in their VED rates;

- limit the VED exemption for vehicles over 25 years old to
those made before 1 January 1973.

NOTES FOR EDITORS

1.     The Chancellor announced in his Budget Statement that
       he was not raising VED in this Budget and that the
       Government would be consulting later in the year on a
       new environmental graduated VED for new and existing
       cars. He plans to introduce a starting rate of VED of
       100 pounds for the least polluting cars next year.

2.     The Chancellor announced that the rate of VED for cars,
       taxis and light goods vehicles would be frozen, at 150
       pounds per annum.

3.     The Chancellor also announced up to 500 pounds off VED
       rates for low emission lorries and buses (see attached
       table). The incentives will apply to commercially
       operated lorries and buses which have cleaner engines.
       Regulations prescribing the emission standard and the
       mechanisms for introducing incentives will be laid
       before Parliament later this year. Details of the
       proposal were published on 23 January. (See DETR Press
       Notice 049.)

4.     The VED exemption for old vehicles will continue to
       apply, but only to vehicles made before 1 January 1973.
       These vehicles will remain subject to the requirement
       to license annually, to display a 'nil' disc and
       produce a valid MOT and certificate of insurance.

5. For further details on the wider environmental package,
see HMT 13.

HM TREASURY PRESS OFFICE

VED concessionary rates for low emission lorries and buses

Rates effective from January 1999

	Non-concessionary rate, pounds	Reduced rate, pounds
Low emission bus 9 Seats and over	160 - 480	150
Low emission goods vehicle 3,500 - 12,000kg	160 - 300	150

Rigid Goods Vehicles over 12,000 kg - Low emission goods classes

Rigid 2 axle	12,001-14,000 kg	470 - 650	150
	14,001-15,000 kg	840	340
	15,001-17,000 kg	1320	840

Rigid 3 axle	12,001-17,000 kg	490	150
	17,001-19,000 kg	850	150
	19,001-21,000 kg	1020	520
	21,001-23,000 kg	1470	970
	23,001-25,000 kg	2230	1730
	25,001-27,000 kg	2340	1840

Rigid 4 or or more axle	12,000-23,000 kg	350 - 510	150
	23,001-25,000 kg	830	330
	25,001-27,000 kg	1470	520
	27,001-29,000 kg	2320	970
	29,001-31,000 kg	3360	2860
	31,000-32,000 kg	4400	3900

Low emission special types	5170	4670
Low emission general haulage	350	150

Articulated Goods Vehicles over 12,000kg - Low emission goods classes


2 axle tractive unit

Any semi trailer	12,001-20,000 kg	460 - 520	150
	20,001-23,000 kg	810	310
	23,001-28,000 kg	1190	690
	28,001-31,000 kg	1740	1240
	31,001-33,000 kg	2530	2030
	33,001-38,000 kg	5170	4670

2 or more axle semi trailer	12,001-26,000 kg	460 - 590	150
	26,001-28,000 kg	1130	630
	28,001-31,000 kg	1740	1240
	31,001-33,000 kg	2530	2030
	kg 31,000-32,000	5170	4670

3 or more axle semi trailer	12,001-28,000 kg	460	150
	28,001-31,000 kg	1090	590
	31,001-34,000 kg	1740	1240
	34,001-36,000 kg	2840	2340
	36,001-38,000 kg	3210	2710

3 or more axle tractive unit

Any semi trailer	12,001-26,000 kg	460 - 590	150
	26,001-28,000 kg	1130	630
	28,001-31,000 kg	1740	1240
	31,001-33,000 kg	2530	2030
	33,001-38,000 kg	2820	2320

Combined transport

38,001-44,000 kg

2820

2320

2 or more axle semi trailer	12,001-28,000 kg	460	150
	28,001-31,000 kg	660	160
	31,001-33,000 kg	1000	500
	33,001-34,000 kg	1470	970
	34,001-36,000 kg	2100	1600
	36,001-38,000 kg	2820	2320

3 or more axle semi trailer	12,001-34,000 kg	460 - 570	150
	34,001-36,000 kg	860	360
	36,001-38,000 kg	1280	780

Combined transport

38,001-44,000 kg

1280

780

NEW VEHICLE EXCISE DUTY SYSTEM TO PROTECT THE ENVIRONMENT

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