Search Legislation

Finance Act 2014

Section 81: VED Rates for Light Passenger Vehicles, Light Goods Vehicles, Motorcycles Etc.


1.This section provides for changes to certain rates of Vehicle Excise Duty (VED) by amendment of the Vehicle Excise and Registration Act 1994 (VERA).  Changes to the rates take effect in relation to vehicle licences taken out on or after 1 April 2014.

Details of the Section

2.Subsection (2) amends Schedule 1 to VERA to increase the general rate of duty by £5 to £230 for vehicles with an engine size of more than 1549cc and by £5 to £145 for vehicles with an engine size of 1549cc or less.

3.Subsection (3) amends paragraph 1B of Schedule 1 to VERA to change most of the graduated rates of duty which apply generally to light passenger vehicles first registered on or after 1 March 2001.  Table 1 provides the rates payable on a first vehicle licence for a vehicle and table 2 provides the rates on all other licences for a vehicle registered on or after              1 March 2001.  Table 2 operates so that vehicles emitting over 225 grams of carbon dioxide per kilometre that were registered in the United Kingdom or overseas before 23 March 2006 pay a lower rate than those registered from 23 March 2006 onwards.

4.Subsection (4) amends paragraph 1J of Schedule 1 to VERA to increase the rate of duty by £5 to £225 for Light Goods Vehicles which are not lower-emission vans.

5.Subsection (5) amends paragraph 2(1) of Schedule 1 to VERA to increase the rate of duty by £1 to £38 for motorbicycles with an engine size of over 150cc but not more than 400cc; by £1 to £58 for motorbicycles with an engine size of over 400cc but not more than 600cc; and by £2 to £80 for motorbicycles with an engine size over 600cc, motortricycles with an engine size over 150cc and trade licences for motorcycles.


6.The rate of Vehicle Excise Duty (VED) chargeable on vehicles is dependent on various factors including the vehicle type, engine size, date of first registration and exhaust pipe emissions data.  The rate applying to cars registered on or after 1 March 2001 is generally determined by the vehicle’s carbon dioxide emissions.  A reduced rate of VED applies to cars using alternative fuels or featuring a hybrid fuel-electric powertrain.  Alternative fuels include Liquefied Petroleum Gas, Compressed Natural Gas and high blend (at least 85 per cent content) bioethanol.

7.Cars and vans registered prior to 1 March 2001, and all motorcycles, are taxed by reference to the engine size.

8.The Government intends to increase VED rates in 2014-15 by no more than inflation for cars, motorcycles and the main rates for vans.

Back to top


Print Options


Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.


More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources