Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential merits of linking vehicle excise duty to vehicle weight.

This question was answered on 18th February 2025

Vehicle Excise Duty (VED), sometimes known as 'road tax' or ‘car tax’, is a tax on vehicles used or kept on public roads. Different rates apply to cars, vans, and motorcycles, and the rate for each vehicle is calculated according to a range of factors, such as its date of first registration, weight, or CO₂ emissions.

Specifically for cars, from 1 April 2017, a reformed VED system was introduced for new cars. Under the reformed VED system, new cars pay a variable first year rate according to the emissions of the vehicle, and zero emission models currently pay nothing.

As announced at Autumn Budget 2024, from 1 April 2025, the VED first year rates are changing to further support the take-up of electric vehicles. The changes announced will freeze the lowest rate for zero emission cars at £10 until 2029-30, and introduce higher rates for higher emitting hybrid and petrol/diesel cars. These changes will only affect those purchasing a new car from 1 April 2025.

After the first year, most cars move to a standard annual rate, currently set at £190. At the moment, hybrid cars receive an annual discount of £10 off this rate, and zero emission cars pay nothing. From 1 April 2025, the standard annual rate will rise to £195 in line with the Retail Price Index (RPI), and the exceptions for zero emission and hybrid cars will end as they begin to pay the standard rates alongside petrol and diesel cars.

The government has no current plans to change the VED treatment for cars to be based on weight. The government keeps all taxes under review and any changes are announced at fiscal events.