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, Reduced
pounds 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 820
Rigid 3 axle 12,001-17,000 kg 490 150
17,001-19,000 kg 850 350
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 970
27,001-29,000 kg 2320 1820
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
33,001-38,000 kg 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
Combined transport 38,001-44,000 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