Vehicle Excise Duty
Contents
Understanding Vehicle Excise Duty (VED) in the UK
Exploring the Ins and Outs of Vehicle Excise Duty
Origins of Vehicle Excise Duty
Vehicle Excise Duty (VED), also known as car tax or road tax, has a rich history dating back to the late 19th century. Initially introduced in 1888, the tax aimed to regulate and limit the use of vehicles in the UK. Over the years, its structure and purpose evolved significantly.
The inception of VED saw taxes based on factors like the power of the car's engine and, later, its carbon dioxide emissions. The revenue generated was originally intended for road infrastructure improvement, but misappropriation led to significant reforms in the mid-20th century.
The Changing Structure of Vehicle Excise Duty
Throughout the 20th and 21st centuries, VED underwent several structural changes, particularly concerning emissions-based taxation. In 1999, the UK government introduced VED bands categorized by emissions, with incentives for cleaner fuel usage. Subsequent revisions expanded the number of bands to 13, encouraging the adoption of newer, more environmentally friendly vehicles.
Recent Developments in VED
In 2014, the UK government discontinued the paper tax disc, shifting to electronic vehicle registration and Automatic Number Plate Recognition for VED enforcement. Additionally, 2017 witnessed a significant overhaul of VED bands and rates, impacting the taxation of new vehicles across the country.