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Budget 2020: Government to review UK road tax VED system for cars

Published 11 March 2020

The Government has announced plans to review the Vehicle Excise Duty (VED) system for new cars in a bid to reduce carbon-dioxide emission.

In today’s budget, Chancellor Rishi Sunak, said he wanted to move away from the current system, which charges drivers according to which CO2 band their car falls into.

Under the current system, the bands range from very broad to very narrow. For example, one band ranges from 191g/km to 225g/km, while another band ranges from 101g/km to 110g/km.

New proposals would see a more ‘granular’ system. That means the end of so called ‘cliff edges’ and a move to a system where a car that emits 129g/km would pay less compared to a car that emits 130g/km.

It comes after the UK put into a law the requirement to reduce net greenhouse gas emissions to zero by 2050. Transport currently accounts for 28 per cent of the UK’s greenhouse gas emissions.

VED rates for cars have been based on the carbon emissions of vehicles since 2001. In 2017, a new system was introduced to drive owners towards cleaner cars by increasing the first licence VED rates for the most polluting cars, which are in the highest tax bands.

Government statistics show that average carbon emissions of new cars have fallen significantly over the past two decades, with reductions every year until 2016. That average increased for the first time in 2017, by 0.8, and by 2.9 per cent in 2018. Initial data for 2019 suggests the upwards trend is set to continue, despite modest growth in the sale of battery electric vehicles.

Part of the reason for this is the introduction of the more real-world WLPT test, which provides more accurate data on emissions. But the Government also says its partly due to the rise in sports utility vehicle (SUV).

In fact, according to the International Energy Agency, the growing number of SUVs are the second-largest contributor to the increase in global carbon emissions since 2010 after the power sector.

A Government spokesman said, ‘The VED rate should send a strong signal to individuals and businesses about which cars to buy as we transition to zero emission vehicles, rewarding those who purchase zero emission and alternatively fuelled cars with no, or lower tax, while ensuring the greater share of the tax burden falls on those who purchase the most polluting cars.’

Comments

HMR    on 12 March 2020

Having encouraged us to move to diesel to reduce C02 emissions the Government then branded it a killer, so we flew back to petrol because EV's and hybrids are currently unaffordable for the majority and lack adequate supporting infrastructure. Isn't that another major cause for rising CO2 emissions?

   on 12 March 2020

Wouldn't it be better to put the tax on fuel so the more you use (and pollute) the more you pay. After all if someone has a 5ltr car but uses it twice a year it's not pumping out as much as a small engine used 5 days a week.

NEIL SCARLETT    on 12 March 2020

Driving cars, building houses, making televisions, farming are but three examples of human activity. All human activity has an effect on the natural word in which we live.
It is not that activity per se that creates the problem, but the scale of said activity.
Fiddling about with so called green energy, taxing high polluting cars, recycling plastic etc etc just amounts to sticking a plaster on a severed artery.
Maybe we should jump on carousel, I would be tempted if it meant that I got my last shower with Jenny.

Paul Bennington    on 12 March 2020

.... hybrids ..... lack adequate supporting infrastructure.

Hybrids need no extra infrastructure. PHEVs do need charging points but self-charging hybrids like the Toyota Prius do not.

DaveWK    on 13 March 2020

.... hybrids ..... lack adequate supporting infrastructure.

Hybrids need no extra infrastructure. PHEVs do need charging points but self-charging hybrids like the Toyota Prius do not.

Self charging is by it’s onboard petrol engine. Truth is most driving is using the ice. It is known that most Company car drivers just carry on as before...using petrol.

H Smiff    on 12 March 2020

Whilst I agree with you, I have been informed that some vehicles are very frugal and yet emit more pollution than others that yomp petrol.
I will admit that I do not know if this is true as no ‘proof’ has been given - no models mentioned.

IF it IS true, I think that this is a bright idea well worth exploring further. Care must be taken, to ensure (for example), that those who live in the area less than well served by Public Transport, are adequately catered for the extra cost that will inevitably arise for those unfortunate to live in these areas.
For instance, I know someone who lives in a village in the ‘back of beyond’ who has only ONE bus OUT and one IN per week- and that because the only route between one market town and the next is through the village or, (for him anyway), an impossible 1.5miles away, on the bypass.

aethelwulf    on 12 March 2020

But when is the increase in population being linked to climate change? Never is the answer. Always duck the real problem and spread all sorts of red herrings about to try to show that a government is 'doing' something however ineffectual.
So I ignore the lot and will run my 2005 Mondeo 2L petrol estate until it falls to pieces. Awhile yet as I look after it myself.

J. Mike Rose    on 13 March 2020

Spot on! It hardly ever gets mentioned and all the climate warriors keep banging on about things that will only make marginal differences usually only in the West, never China or India. Eventually we will ended up with some form of population control either by mankind or Mother Nature but which one who knows?

Keith Moat    on 13 March 2020

Spot on! It hardly ever gets mentioned and all the climate warriors keep banging on about things that will only make marginal differences usually only in the West, never China or India. Eventually we will ended up with some form of population control either by mankind or Mother Nature but which one who knows?

COVID-19 perhaps ?

Lloydyboy    on 13 March 2020

I have a 330d which is a 2016 model and I brought it just over 2 years old in Jan 19. When new it was 48k, having seen the new rates for new cars the road tax would be £150 per year plus an additional £325 per year for the first 5 years! What an absolute joke and I'm sorry but this is encouraging me to now keep this car till it disintegrates rather than change every 3 years and be forced to pay extra tax to use roads full of holes. This car can hit 68mpg on a motorway commute so why should it be penalised when there are cars paying little if not no tax that aren't so efficient. This country is doomed.

Keith Moat    on 13 March 2020

Then the government wonder why new car sales are down.

Italian Tony    on 13 March 2020

This country has been doomed for the last 40 years, Where is the so called British is Best. Where is British car industry. You left Europe, now you are really in debt

Nicholas Lngrishe    on 13 March 2020

Yes, aethelwulf has spotted the elephant in the room; quite simply,

too many people but it is politically incorrect to state the obvious!

Edited by Nicholas Lngrishe on 13/03/2020 at 09:13

GTD 184    on 13 March 2020

I think this government need to understand why so many people are purchasing SUV's, SAV's and crossovers.........They only need to see the state of our third world, pot holed flooded roads! At the same time they criticise the public for buying SUV's but then all of royalty and most politicians drive them or are chaufferred around in these types of vehicle! "Do as we say not as we do!"

Keith Moat    on 13 March 2020

I can't believe for one minute that people think. "oh dear the roads are bad and full of potholes, lets buy an SUV", they buy them either for status or because they are useful for loading up with family stuff. Otherwise they wouldn't have 20" wheels and skinny tyres. The one crossover I have driven as a loaner when my car was in for repairs was a Vauxhall Mocka with a 1.0 litre engine and 6 gears and i can honestly say it is the the most uncomfortable and awkward to drive vehicle I've ever driven in 47 years of driving. It was way over geared in first and second to compensate for the little engine and the short wheelbase threw it all over the place on anything but smooth tarmac, so no it couldn't cope with potholed roads.

Edited by Keith Moat on 13/03/2020 at 12:52

Red Spinner    on 13 March 2020

I have a friend who "hotseats" a big lorry rig with four other drivers. It goes all over the continent and travels over 125,000 miles a year - at about TEN mpg overall (yes that's 12,500 gallons of fuel p.a.). I have calculated that it uses enough to keep my "killer diesel" car running for over 80 years -and these figures are conservative (no pun intended).
But I am an easy target!!!!!!!!!

   on 13 March 2020

I have a CGON EZERO unit fitted which produces hydrogen into the air intake. This results in a more efficient burn of diesel in the combustion chamber.
On my last MOT with the emissions test the machine did not produce any results as the emissions were below the threshold for reading. The tester wrote on the readout “TOO CLEAN”

I drive a Mercedes E250 diesel with no government recognition of the reduced output. I pay the same as some old diesels belting out black smoke!!

These hydrogen units are really effective, even Stobbarts have them fitted to their trucks as there can be a fuel saving as well as the environmental improvements.

The government test vehicles on their annual MOT and the VED charges should reflect the result. Not charged on what your V5 says as a badly maintained vehicle will produce more CO2.

BrianMaiden    on 14 March 2020

Never heard of these Hydrogen units. Where do you get yours, how do you fill it? Who fitted it for you? Are they suitable for all turbo diesels?

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