Tax Shock for High Emission Drivers

The Treasury have this week confirmed plans to reform the current vehicle excise duty system (VED), further penalising those with high emission cars and spurring outrage among drivers.

The amendments which will be brought into effect as soon as April next year will see older cars, previously exempt from the high emissions levy, subject to a heft increase in road tax, potentially doubling this cost for some drivers.

Designed to both encourage manufacturers to produce, and consumers to buy more environmentally friendly vehicles, cars produced after 1st March 2001 will be subject to a carbon emissions banding that will classify their efficiency on a scale of A to M with ‘A’ rated vehicles being the most environmentally friendly, and ‘M’ rated vehicles being the most polluting.

Drivers of band M cars, those that produce over 255g of carbon dioxide per kilometre, will see their road tax increase from its present £210 level firstly to £420 in 2009, then £455 in 2010.

While cars classified as band L, those that produce between 225g and 255g of CO2 per kilometer, will be stung with a £220 increase by 2010, taking the VED due from £210 to £430 in 2010.

The reform, which is set to raise £1.2billion in revenue for the government on top of the estimated £2billion generated by high fuel prices, has come under widespread criticism.

This is not only because the planned VED changes are likely to hit low income families the hardest (many of the cars in the top end of the high emissions banding are older family sized cars such as the Renault Espace), but also because many believe details of this reform were intionally slipped through in the small print of this year’s budget.