Budget 2007 announced VED rates for this year and the next two years. In 2008-09 the rate for the most polluting cars in band G will increase to £400, with a freeze in the following year, rates for cars in bands C to E will increase by £5 in each of 2008-09 and 2009-10, as will band F rates.
The band A rate introduced in Budget 2006 for the very lowest carbon cars will remain zero and will continue to encourage take-up and assist development of the low carbon car market. The new lower £35 band B rate for low carbon cars will remain frozen until 2010-11. Rates for pre-March 2001 cars and all light goods vehicles will increase by £5 in each of 2008-09 and 2009-10.