Vehicle Excise Duty as an Environmental Tax

HC 907, Tenth Report of Session 2007-08 - Report, Together with Formal Minutes, Oral and Written Evidence

Author:: House of Commons - Environmental Audit Committee
Publisher:: TSO (The Stationery Office)

Vehicle Excise Duty as an Environmental Tax (HC 907)

The 2008 budget made some significant changes to annual road tax, also known as vehicle excise duty (VED). The main changes included the introduction of six new VED bands from 2009-10 (bringing the total number of bans to 13), applying this new regime of 13 bands to exisiting cars on the road first registered on or after 1 March 2001, and the introduction of a new rate of VED for new cars in the first year in which they are bought.

With this report, 'Vehicle Excise Duty as an Environmental Tax (HC 907)', the Environmental Audit Committee's aims were:

to examine the projected enivronmental impacts of these changes;
to review how fair these changes are; and
to make recommendations to the Treasury as to how it should proceed.

The Committee felt that there was nothing intrinsically wrong in the rebanding of cars registered since 2001 but that there was a lack of data about the financial impacts of these change on lower-income groups. The new first-year rates were welcomed.

However concerns remain that the differentials between VED bands are still not large enough to drive market transformation. The Treasury should have taken much greater care to explain the changes in VED in the Budget. If the point of green taxes is to change behaviour, they need to be properly publicised. In general, the Treasury needs to develop a proper communications strategy.

Extent	66 pages	ISBN	9780215523419
Size	A4	Price	£13.50
Binding	Paperback	Published	04 Aug 2008
Availability	Colour copy: 3 - 5 days	Delivery	Delivery options and charges