Vehicle Excise Duty
The basis of Vehicle Excise Duty (VED), also known as "road tax", was changed so that cars registered on or after 1 March 2001 are taxed according to the VED band that they fall into. VED bands are based on the results of a laboratory test, designed to calculate the theoretical potential emissions of the vehicle in grammes of CO2 per kilometre travelled, under ideal conditions. This has encouraged a 21% increase in the ownership of diesel cars, which produce lower CO2 emissions, but increase particulates. Company Car Tax, regulated by the Her Majesty's Revenue and Customs (HMRC) department, was also revised to reflect both the list price and CO2 emissions.