George Osborne, Chancellor of the Exchequer, delivered some major changes relating to Vehicle Excise Duty that will come into effect in the coming year:
- the way Vehicle Excise Duty (VED) is calculated and spent;
- new bands of VED; and
- extending the deadline for the first MOT on new cars and motorcycles.
The way VED is calculated and spent will come into effect from 2017. The Chancellor in his Budget speech, confirmed that the success of low emission cars is having an adverse effect on the amount of money raised from VED.
Three new bands of VED are being introduced from 2017:
- zero emission;
- standard; and
Existing cars already on the road will not be affected by the changes. The standard rate which will apply to most new cars will be £140, less than the average paid by motorists today.
Good news for those purchasing new cars: the Government will extend the deadline for the first MOT of new cars and motorcycles from 3 years to 4 years.
Source: HM Government