Cars: Taxation
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential merits of a weight-based system of vehicle taxation for cars.
Answered by Dan Tomlinson
Vehicle Excise Duty is a tax on vehicles used or kept on public roads. For certain vehicle classifications, VED liability is partially calculated in accordance with the vehicle’s weight, reflecting the greater road damage caused by heavier vehicles. For example, Heavy Goods Vehicle (HGV) VED rates are set based on a vehicle’s weight, suspension and trailer.
The Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.
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