Fleet News

Chaos looms as new VED date is revealed

THE Government is expected to introduce its four-band carbon dioxide emission-based graduated Vehicle Excise Duty in October 2000, Fleet NewsNet can reveal. And there are now fleet industry fears that the change of date could spark 'monumental chaos and huge confusion' in the fleet industry, impacting dramatically on defleeting strategies and residual values as well as company car choice lists.

Chancellor of the Exchequer Gordon Brown pledged in his March 1999 Budget that the new VED regime would come into effect in 'autumn 2000' and that was generally taken to mean September 1, 2000 to coincide with the launch of X-plate cars. However, Fleet NewsNet has learned that the banded system and significant changes to Driver and Vehicle Licensing Agency computer systems will not be ready until at least October and some sources have suggested November or December. Industry rumours have already suggested that the four-band VED system could range from £100 per year for the cleanest cars up to £475 for those with the highest CO2 emissions.

With no easily identifiable change date, fleets will find that initially company car drivers will be able to continue to choose X-plate cars from current choice lists. However, with the introduction of graduated VED, choice lists will change as cars become cheaper or more expensive to operate from both the annual VED cost and residual value perspectives. Fleets will need to make it clear when they sell a vehicle whether it is a pre-VED or post-VED change car if there is not an easily identifiable change date. It is not expected that the implementation date will be announced until the March 2000 Budget.

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