Fleet News

Banding boost for less-polluting vehicles

THE new Vehicle Excise Duty will place cars registered after September 1, 2000, into one of four bands, based on their carbon dioxide emissions. Each band will have a separate annual tariff, used as an incentive to encourage new car buyers to select vehicles from a lower band. From October 1999, all new cars in the UK will have their CO2 emissions noted on the V55 document which is sent by dealers to the DVLA which creates the V5 document.

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.

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