New Car Tax Scheme to Reward Gas Guzzlers

14 February 2017

PollutionBack in 2015, the then-chancellor George Osborne announced changes to Vehicle Excise Duty, which come into force for new registrations as of 1st April 2017.

These changes mean that there will no longer be an incentive, in the form of reduced tax, to buy a smaller vehicle, or a Low Emissions Vehicle when replacing a car.

In addition, the duty on larger cars is going to be reduced. As the AA puts it in their press release “Gas guzzlers rewarded under new VED scheme”

Finally, Osborne announced at the time that the revenue from Vehicle Excise Duty was now going to be put into roads maintenance and road building, with the explanation that this change was going to help to stimulate a wave of new roads across the country.

We feel strongly that this move gives the wrong impression. The old system was seen to be rewarding people for making decisions that would have less of an impact on the environment, whereas the new scheme makes no such distinction. As evidenced by the AA’s example, this increases the cost of ownership for a Toyota Prius by over £700 across 5 years, whilst simultaneously reducing the tax load for a Mitshubish 4x4 by almost £1000 over the same period.

Obviously, political climates change. Following on from the ClientEarth legal action, the government is under scrutiny and needs to show that it is taking the challenge of air quality seriously. The AA is calling on them to reverse this change at the upcoming budget. We would echo this call, as well as demanding that instead of using the revenue to fund roads, they use it to fund air pollution reduction schemes, and better support for Public Transport.

Steve Miller discussed this issue with Stuart Linnell on BBC Northampton on 13th February 2017. You can listen to the interview here.


AA Press Release

https://www.theaa.com/about-us/newsroom/lack-of-awareness-of-new-ved-system






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