Vehicle Excise and Registration Act 1994 Schedule 1 Paragraph 4D

Graduated rates of vehicle excise duty for light passenger vehicles based on CO2 emissions

Paragraph 4D of Schedule 1 establishes a graduated system of vehicle excise duty rates for light passenger vehicles, where the amount of duty payable depends on the vehicle's carbon dioxide (CO2) emissions level and fuel type.

• Light passenger vehicles first registered on or after 1 March 2001 are subject to graduated duty rates based on their CO2 emissions figures, as certified during the type approval process.
• Vehicles are divided into bands according to their CO2 emissions level, with lower-emission vehicles paying less duty and higher-emission vehicles paying more.
• A reduced rate of duty applies to vehicles that meet alternative fuel criteria (such as those powered by electricity, gas, or hybrid systems), recognising their lower environmental impact compared to conventional petrol or diesel vehicles.
• Where a vehicle does not have a certified CO2 emissions figure (for example, because it was not subject to the relevant type approval process), it falls outside the graduated system and is taxed under different provisions.