# Finance Act 2025, Section 71: Vehicle excise duty: zero-emission vehicles

Extent: E+W+S+N.I.

(1) VERA 1994 is amended as follows.
(2) In section 62 (other definitions), after subsection (1A) insert—
“(1AA) For the purposes of this Act, a vehicle is a “zero-emission vehicle” if the vehicle’s rate of CO₂ emissions measured in grams per kilometre driven, or grams per kilowatt hour, is zero.”
(3) In Schedule 1 (annual rates of duty)—
(a) in paragraph 1—
(i) in sub-paragraph (2), after “propelled” insert “, or zero-emission,”;
(ii) in sub-paragraph (2A), after “propelled” insert “, or zero-emission,”;
(b) in paragraph 1A (vehicles to which Part 1A applies), after sub-paragraph (1) insert—
“(1A) Sub-paragraph (1B) has effect where—
(a) the vehicle’s rate of CO₂ emissions in grams per kilometre driven is zero,
(b) the certificate mentioned in sub-paragraph (1)(b) does not specify a CO₂ emissions figure, and
(c) this Part of this Schedule would apply to the vehicle if the condition in sub-paragraph (1)(b)(ii) were met.
(1B) For the purposes of this Part of this Schedule—
(a) the certificate is regarded as specifying a CO₂ figure of zero in terms of grams per kilometre driven, and
(b) accordingly the applicable CO₂ emissions figure is to be taken to be zero.”
(c) in paragraph 1GA (vehicles to which Part 1AA applies), after sub-paragraph (1A) insert—
“(1B) Sub-paragraph (1C) has effect where—
(a) the vehicle’s rate of CO₂ emissions in grams per kilometre driven is zero,
(b) the certificate mentioned in sub-paragraph (1)(b) does not specify a CO₂ emissions figure, and
(c) this Part of this Schedule would apply to the vehicle if the condition in sub-paragraph (1)(b)(ii) were met.
(1C) For the purposes of this Part of this Schedule (and notwithstanding anything in sub-paragraph (5))—
(a) the certificate is regarded as specifying a CO₂ figure of zero in terms of grams per kilometre driven, and
(b) accordingly the applicable CO₂ emissions figure is to be taken to be zero.”
(d) in paragraph 1N, in sub-paragraph (b), at the end insert “or a zero-emission vehicle”;
(e) in paragraph 2 (motorcycles)—
(i) in sub-paragraph (1)(a), after “propelled” insert “or a zero-emission vehicle”;
(ii) in sub-paragraph (3), in the definition of “motorcycle”, after “propelled” insert “, or zero-emission,”.
(4) In Schedule 2 (exempt vehicles)—
(a) in the italic heading before paragraph 20G, at the end insert “etc”;
(b) in paragraph 20G (electrically propelled vehicles), after sub-paragraph (1) insert—
“(1A) A zero-emission vehicle is an exempt vehicle.”
(5) The amendments made by this section have effect in relation to licences taken out on or after 1 April 2025.

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Source: https://www.legislation.gov.uk/ukpga/2025/8/section/71 (the official version)
Page: https://openlegislation.uk/finance-act-2025/section-71
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.