Summer Budget 2015: Chancellor George Osborne has announced that vehicle excise duty (VED) will be reformed in his Summer Budget 2015.
The changes will affect new cars registered from 1 April 2017. There will be no changes to VED for existing cars.
First-year rates will depend on the car’s carbon dioxide emissions, and thereafter there will be three duty bands: zero emission, standard and premium.
Osborne said: “For standard cars, that covers 95% of all cars sold in the UK, the charge will be £140 a year. That’s less than the average £166 that motorists pay today.
“In total, we’ll only raise the same amount of revenue from VED in the future that we do today, but that revenue will be secure for the long term. And I will return this tax to the use for which it was originally intended. I am creating a new Roads Fund.”
