Fleet News

Vehicle excise duty will not be abolished, says minister

THE Government does not intend to abolish Vehicle Excise Duty and replace it with additional duty on fuel. In a written response to Fleet NewsNet's sister publication Fleet News' report 'Driving Business Forward - the future of the company car and business transport,' junior transport minister Glenda Jackson dispelled rumours of major changes to VED.

'With regard to the report's specific recommendation that VED should be abolished and replaced with additional duty on fuel, the Government has no immediate plans to abolish VED, although it will continue reviewing VED to encourage low emission vehicles,' she said in a letter to Labour MP for Leeds North East Fabian Hamilton who launched the document.

'The Government is also committed to increasing fuel duty by at least 6% above the rate of inflation every year for the lifetime of this Parliament. This strategy - the main fiscal measure to reduce carbon dioxide emissions from road transport - will ultimately shift the burden of taxation away from car ownership towards car use.'

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