Consultation on changes to the Vehicle Excise Duty system.

[FROSTYBALLS]

Currently the UK Government is part way through a consultation on changes to the Vehicle Excise Duty system.

Currently for new cars, VED for the first year is based on bands of CO2 emissions, and a standard rate for subsequent years.

Government is concerned that the take up of greener vehicles is lagging, especially in light of the popularity of large SUV's.

Obviously things are at the consultation stage and nothing has actually been decided yet, including actual VED rates, but be prepared for changes in the next year or so.

Options being considered include:

1). For the first year, having a granular system based on the actual CO2 emissions. For example an owner of a vehicle emitting 129 g/km would pay less than one emitting 130 g/km. An illustrative graph for first year costs within the consultation document, shows the maximum payable of £2,235 rising to around £4,400

2). Extending the first year CO2 based duty to year 2 or years 2 & 3.

3). After year 1, having multiple standard rates based on emissions. For example, having a zero rating for zero emissions vehicles, a lower rate for vehicles emitting under 150  g/km, and a higher rate for vehicles emitting over 150 g/km.

4). Abolishing the standard rate payable after year 1.