Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of linking road tax thresholds to the level of car prices.

Rates of Vehicle Excise Duty (also known as ‘road tax’) depend on the vehicle’s date of first registration and characteristics such as emissions. In 2017, the Government made changes to the VED system to incentivise the uptake of cleaner vehicles. In his 2022 Autumn Statement, the Chancellor announced that from April 2025 electric cars, vans and motorcycles will begin to pay VED in the same way as petrol and diesel vehicles.

Owners of more expensive cars already pay an additional VED supplement for the first five years after registration. This applies to cars with a list price of £40,000 or over.

As with all taxes, VED is kept under review and any changes are considered and announced by the Chancellor.