SMMT response to Budget 2000 Vehicle Excise Duty The current VED system has been frozen until March 2001 when the following changes will take place: ·Reduced rate from standard £155 charge to £105 for all existing vehicles under 1200cc. ·New four-band VED system for all new cars, based on carbon dioxide (CO2) emissions. Within each band there will be a £10 discount for cars using cleaner fuels and technology. A £10 penalty will also be imposed within each band for diesel vehicles.