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<p>The government uses the tax system to encourage the development and take-up of
cars with low carbon dioxide (CO<sub>2</sub>) emissions to meet our legally binding
CO<sub>2</sub> targets and our ambition for the majority of all new cars and vans
sold to be 100% zero emission by 2040.</p><p> </p><p>Zero emission cars attract favourable
rates of both Vehicle Excise Duty (VED) and company car tax. For example, on first
registration, a zero-emission car is not liable to pay any VED, whilst the most polluting
models attract a VED rate of over £2,000.</p><p> </p><p>The government has also recently
responded to the consultation on reforming the VED system for vans. This confirmed
that from April 2021 zero and ultra low emission vans will receive a significant VED
discount compared to conventionally fuelled alternatives.</p><p><strong> </strong></p>
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