Introduction Background
6.The rate of Vehicle Excise Duty (VED) chargeable on vehicles is dependent on various factors including the vehicle type, engine size, date of first registration and exhaust pipe emissions data.  The rate applying to cars registered on or after 1 March 2001 is generally determined by the vehicle’s carbon dioxide emissions.  A reduced rate of VED applies to cars using alternative fuels or featuring a hybrid fuel-electric powertrain.  Alternative fuels include Liquefied Petroleum Gas, Compressed Natural Gas and high blend (at least 85 per cent content) bioethanol.
7.Cars and vans registered prior to 1 March 2001, and all motorcycles, are taxed by reference to the engine size.
8.The Government intends to increase VED rates in 2014-15 by no more than inflation for cars, motorcycles and the main rates for vans.