The four bands, which Fleet NewsNet understands will not be announced until next March, are rumoured to start with cars emitting less than 135g/km of CO2, which will pay annual VED of £100. The next band of 136-180g/km of CO2 would pay £175, cars emitting 181-240g/km would pay VED at £250 and for vehicles emitting over240g/km it would be £475. Diesel vehicles may incur a penalty, while gas-powered vehicles could be incentivised.
For cars already on the road prior to the new VED system, a four-band system is expected to apply, expanding on the system announced in the March Budget and implemented from June 1, which is based on engine size. All cars under 1100cc currently pay £100, and all those over pay £155. Using the same £100, £175, £250 and £475 charges as in the CO2 system, the suggested band parameters could be below 1100cc, 1101-1600cc, 1,601-2200cc, and 2201cc and above.