6 March 2001

LESS TAX FOR MORE DRIVERS

From 1 March 2001, almost 100,000 owners of cars between 1100 and 1200 c.c. will benefit from a reduced rate of car tax (vehicle excise duty).

The DOE’s Driver and Vehicle Licensing Agency (DVLNI) has extended the reduced tax, currently enjoyed by the owners of cars up to 1100cc, to include cars up to 1200cc as part of the Government’s drive to encourage people to run smaller cars that are more fuel efficient.

The benefit of the change is being backdated for one year and a rebate will be paid on licences issued between March 2000 and February 2001. Provided the licence was not traded in for a refund, there will be a rebate of £55 for a 12 month licence taken out during that period, and £27.50 for a 6 month licence.

As of 1 March 2001, new licences will cost £105 for 12 months or £57.75 for 6 months for owners of cars with engine capacity up to 1200cc, compared to the standard rate of £160 and £88.

During March, DVLNI will send a rebate application form to the keepers of eligible cars, inviting them to apply for their rebates. The form must be completed and returned to DVLNI before the money can be paid.

For current licences, the rebate will be paid to the registered keeper as at the 28 February. For licences which have already expired, the rebate will go to the registered keeper as at the day it expired.

The new lower rate will only apply to cars registered before 1 March 2001. New cars registered after that date will go onto a completely different system where the tax is based on carbon dioxide [CO₂] emissions.

NOTES TO EDITORS:

CLAIMING THE REBATE

The rebate application forms are being sent out in batches during the first weeks of March. Anyone who thinks they are entitled to a rebate and has not received a form by the 23 March 2001 should contact DVLNI on (028) 7034 1510 or e-mail dvlni@doeni.gov.uk. The rebate letter will detail the exact amount of the rebate owed and the conditions of eligibility.

The tax disc should not be sent back with the form. It should remain on the car until the licence is next renewed. New licences issued after March 2001 will show the reduced rate of VED.

WHEN WILL THE REBATE BE RECEIVED?

Provided the application is completed correctly, DVLNI aims to process valid claims within 28 days. If the rebate has not been received within 6 weeks, applicants should contact the DVLNI on (208) 7034 1510 or e-mail dvlni@doeni.gov.uk.

WHAT IF YOU ‘CASH IN’ YOUR LICENCE FOR A REFUND?

Licences sent in for refunds under the normal rules before 1 March will be paid as usual, but they will not then be eligible for the rebate. Licences cashed in after March 2001 having already received a rebate will only be paid a refund at the reduced rate.

OTHER CHANGED AFFECTING SMALL CAR OWNERS

*Plans to further extend the engine size threshold - The Chancellor, in his pre-budget statement in November 2000 announced proposals to extend the lower rate further to include cars up to 1500 c.c. in July.

*These plans are subject to changes in the Chancellor’s March 2001 Budget announcement.

FURTHER INFORMATION

For further information on changes to Vehicle Excise Duty,

visit the DVLNI web-site at www.doeni.gov.uk/dvlni

or telephone DVLNI on 02870 341510

or call the leaflet line on 08456052222.

Further media information contact: Paddy Murphy DOE Press Office

telephone 02890 540014.