Government to review VED under influence of WLTP emission testing results

The Government has announced that existing Vehicle Excise Duty rates will, for the time being, be maintained on introduction of Worldwide harmonised Light vehicles Test Procedure (WLTP) carbon dioxide (CO2) emissions data for motoring taxation purposes from April 2020 (see table below).

However, as the newly published 2019-20 Draft Finance Bill makes clear a two-tier Vehicle Excise Duty regime will eventually be introduced. That’s because all cars registered before April 1, 2020 will continue to use existing New European Driving Cycle (NEDC) CO2 values for Vehicle Excise Duty purposes, while those registered from April 1, 2020 will use WLTP-based emissions figures.

Later this year the Government will publish a call for evidence seeking views on moving towards a more dynamic approach to Vehicle Excise Duty which recognises smaller differences in CO2 emissions as a result of WLTP testing.

Justifying future changes to the Vehicle Excise Duty regime the Government said that WLTP testing resulted in “many more unique CO2 values, mainly due to model-specific testing”.

As a result, the current Vehicle Excise Duty system was likely to result in “differences between models not being fully recognised in the Vehicle Excise Duty rates paid”. Consequently, it said: “This could exacerbate the current ‘cliff-edges’ between Vehicle Excise Duty bands.”

Vehicle Excise Duty for cars first registered from April 1, 2019

Rates for second tax payment onwards for cars registered after April 1, 2017

Fuel type                     12 month rate
Petrol or diesel           £145
Electric                         £0
Alternative fuel          £135

Cars with a list price above £40,000 pay a £320 supplement for five years from the second time the vehicle is taxed.

Vehicle Excise Duty from April 1, 2019 for cars registered between March 1, 2001 and March 31, 2017

VED Band       CO2 emissions (g/km)           Standard rate*

A                     Up to 100                                £0
B                     101-110                                   £20
C                     111-120                                   £30
D                     121-130                                   £125
E                      131-140                                   £145
F                      141-150                                   £160
G                     151-165                                   £200
H                     166-175                                   £235
I                       176-185                                   £260
J                      186-200                                   £300
K**                 201-225                                   £325
L                      226-255                                   £555
M                    Over 255                                 £570

*Alternative fuel discount 2019/20 £10 all cars
**Includes cars emitting over 225 g/km registered before March 23, 2006.

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