The latest UK budget is currently underway and the first big news for motorists concerns car tax, or Vehicle Excise Duty, to give it the official name.

Chancellor George Osborne has stated that the UK has added only 300 miles of road to its motorway network in the past 25 years, and highlighted the need for additional investment – something that will already be painfully clear to anyone who frequently uses the nation’s road network during peak periods.

The first way Osborne plans to find money to spend on new roads is by overhauling the vehicle excise duty system. This is currently based on emissions, with some owners of particularly “green” cars not having to pay any car tax at all. Under the current system, Osborne states that by 2017, 75% of new vehicles won’t be liable for the tax in their first year.

This is now set to change, with car tax being reintroduced for all new vehicles from 2017. Tax levels will still be based on emissions, but with changes made to account for “new technology,” according to The BBC.

Once the system is changed, there will be three different vehicle excise duty bands for new cars, named as “zero emission,” “standard,” and “premium.” Tax on new cars will apparently average £140 per year.

As always, published detail will reveal more once the budget announcement is over and we will provide more updates here.

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