Tax: High polluting cars to face higher tax
Chelsea tractor tax 'unlikely to make much difference'
Thursday, 13 Mar 2008 13:21
Higher taxes for more polluting vehicles outlined in yesterday's Budget will have limited effect, according to tax and motoring experts.
Alistair Darling unveiled plans yesterday for major reform of the vehicle excise duty (VED) system in 2009 to reward drivers of cleaner cars and hit more polluting motorists.
Also in 2010, drivers of more polluting cars will face higher road tax in the first year on the road – while less polluting cars could be exempt.
Drivers were also hit with a 2p fuel duty rise from next year, but the 2p rise due for April will be postponed until October.
However, the measures have been described as ineffectual and more likely to hit families than high performance car drivers.
"Although cutting carbon emissions is vital the obvious question here is – how fair are these charges?" said Ashton Berkhauer, insurance expert at uSwitch.com.
"The new proposal could see larger family cars, such as the Renault Espace, being subjected to the same tax as a new Lamborghini Gallardo.
"An extra £1,000 may be small change to a Lamborghini buyer considering the £126,350 price tag. However, this could be a real strain on an average family’s budget."
The Retail Motor Industry Federation (RMIF) has welcomed the fuel duty delay, but described the tax on bigger cars as a "blunt instrument".
"It will be those who really need larger vehicles for their daily lives that suffer most," said Sue Robinson, director of the RMI National Franchised Dealers Association.
"Families, rural dwellers, farmers, and business users are less able to absorb this increase, as they are already paying extra to use their vehicles through fuel duty, company car tax, and other measures."
Drivers were also warned the fine print of the Budget revealed extra funds were to be handed over for a pilot road pricing scheme.
Alec Murray, RMIF chairman, said: "There are still many unanswered questions surrounding the concept of road pricing.
"As it is likely the motor industry would be in the front line of implantation it is vital that government consults with both motor retailers and manufacturers before going ahead with any study on the issue."