Vehicles registered after January 1, 2001, pay VED fees based on their CO2 emissions.
How VED Fees are Calculated
VED fees are calculated based on the vehicle’s engine size and CO2 emissions. Vehicles registered between 1985 and 2001 pay VED fees based on their engine size, with different rates depending on the model. Cars manufactured before January 1, 1985, are exempt from VED charges.
The increase is part of a new tax system that aims to reduce fuel poverty. The new tax is targeted at the most polluting vehicles, with those below 1,549cc being considered less polluting due to their lower emissions levels.
The increases will be applied across various categories including the tax-free threshold, personal allowance, and the threshold for pension contributions. Here are some of the tax-free allowances and thresholds that will be affected: The tax-free threshold will increase by 5.1% to £11,850. This represents a year-on-year increase of £610. The personal allowance will increase by 5.1% to £12,570. This represents a year-on-year increase of £635. The threshold for pension contributions will increase by 5.1% to £10,000. This represents a year-on-year increase of £510. The threshold for National Insurance Contributions will increase by 5.1% to £9,568.