Budget 2006 - Road tax reforms questioned

Wednesday, 22 March 2006 12:00

In his Budget today, Gordon Brown announced sweeping changes to road tax - with polluting cars charged more and environmentally friendly vehicles charged less.

Touted as a tax on 4x4s, the chancellor's changes are more subtle than that.

Cars will, in future, be taxed depending on how much carbon dioxide they emit - with any vehicle emitting less than 100g per kilometre not paying any tax.

By contrast, heavily polluting vehicles - producing more than 226g of CO2 per kilometre - will pay a new, higher, road tax fee of £210.

However, there are very few cars available that produce less than 100g per kilometre - with even the exceptionally efficient 0.7 litre Smart fortwo producing 113g per kilometre.

By contrast rather a lot of cars produce more than 226g per kilometre - including Skoda Superb 1.8, the 1.4 litre Mazda RX, and the Ford Mondeo 3.0 Ghia.

Additionally, drivers of many 4x4s - including the BMW X3, the LandRover Freelander, and the Volvo XC90 - will escape this new top-level of road tax.

However, the effectiveness of changing the tax regime to make the most polluting vehicles pay more road tax has been questioned.

"A zero rate of vehicle excise duty for the most environmentally friendly vehicles and a higher rate for the most polluting build on the current system are to be broadly welcomed," said the RAC's Paul Hodgson.

"However, when it comes to buying a new car the government's own research shows that CO2 emissions and rates of tax are very low on the list of considerations.

"Currently factors such as the brand of the car and whether it has air conditioning are greater concerns."

The new system

• Cars producing less than 100g/km of CO2 - free

• Cars producing between than 101g/km and 120g/km of CO2 - £40 for petrol cars, £50 for diesel

• Cars producing between than 121g/km and 150g/km of CO2 - £100 for petrol cars, £110 for diesel

• Cars producing between than 151g/km and 165g/km of CO2 - £125 for petrol cars, £135 for diesel

• Cars producing between than 166g/km and 185g/km of CO2 - £150 for petrol cars, £160 for diesel

• Cars producing between than 186g/km and 225g/km of CO2 - £190 for petrol cars, £195 for diesel

• Cars producing more than 226g/km of CO2 - £210 for petrol cars, £215 for diesel

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