Greener car discounts to be removed to pay for new road-building fund

cepheus

So much for the 'Greenest Government Ever'. I've been trying to get my head around this statement of the Chancellors.

If you can only afford an old second car you have to pay more tax, only a Labour government could have designed something so regressive.

So if you earn so much you can waste your earnings on a new car with an enormous 1st year devaluation, there is a tax incentive to go green. After that any incentive is almost eliminated.

However, for those really on a budget they will be looking for a small secondhand non-electric car which emits less than 120g/km CO2, (Link 1)so the present VED will be increased from £0-30 to (Link 2) £140.

In fact those with a car emitting as little as 1 g/km will pay the same as those with the most inefficient most polluting cars on the road. I think the big car companies as well as the oil giants have been lobbying.

DUTR

cepheus wrote: »

So much for the 'Greenest Government Ever'. I've been trying to get my head around this statement of the Chancellors.

"If you can only afford an old second car you have to pay more tax… only a Labour government could have designed something so regressive.”

So if you earn so much you can waste your earnings on a new car with an enormous 1st year devaluation, there is a tax incentive to go green. After that any incentive is almost eliminated.

However, for those really on a budget they will be looking for a small secondhand car with 101 to 120g/km CO2, so the present VED will be increased from £20-30 to £140 which will be exactly the same as for a large car using twice as much fuel! I think the big car companies as well as the Oil giants have been lobbying.

That's not how I understand it, the current cars remain the same.

Iceweasel

As the road repairing/building fund will only apply to England, does that mean that the new car tax categories will not apply to vehicles registered in other parts of the (dis)United Kingdom of Great Britain & Northern Ireland?

Osborne is nuts.

FreddieFrugal

DUTR wrote: »

That's not how I understand it, the current cars remain the same.

Yes the new tax system will only affect cars registered from 2017 onwards. Just as how currently someone driving a car registered before 2001 will still be paying tax based on the size of the engine rather than the CO2 emissions. Cars registered between 2001 and 2017 will be using the current tax bands.

Just stick to used cars registered up to 2017 and one may be able to stick with the low tax until the bands change again...if the car lasts that long.

gzoom

For a £40K+ car producing >255 g/km CO2:

New system: £2000 first year + >£40K tax + base rate tax= £4250 in first 5 years.
Old system: £1100 first year, than £500 = £3100 in first 5 year.

The old system was open to abuse, with manufactures like Porsche/BMW etc putting hybrid systems onto their most polluting machines just to enable them to do the EU certification tests on hybrid power alone, and therefore qualify for low tax due to <100 g/km - but in real life driving are far more polluting.

The only cars that will qualify for Zero road tax will be full battery electric cars.

peter_the_piper

cepheus wrote: »

However, for those really on a budget they will be looking for a small secondhand non-electric car which emits less than 120g/km CO2, so the present VED will be increased from £0-30 to £140.
.

Your link Author:Peter Thomas
Date Updated:10th Mar 2015

Any up to date info Ceph?

AdrianC

Iceweasel wrote: »

As the road repairing/building fund will only apply to England, does that mean that the new car tax categories will not apply to vehicles registered in other parts of the (dis)United Kingdom of Great Britain & Northern Ireland?

NI does car tax separately to GB, so ignore them.

Scotland and Wales fund their own roadbuilding and maintenance, as part of the money sent to them by Westminster under the devolution agreements. Car taxation isn't devolved, so they'll pay in exactly the same way as England.

daveyjp

gzoom wrote: »

The only cars that will qualify for Zero road tax will be full battery electric cars.

Unless it costs over £40,000 and it will then be zero plus the £310 surcharge for 5 years.

Joe_Horner

cepheus wrote: »

[...] I think the big car companies as well as the oil giants have been lobbying.

It's a little naieve to think that the car makers or "big oil" really care either way about things like this. None of them are one-trick ponies, and they will produce and sell product regardless because their products ("transport and energy", NOT "cars and oil") are things we all want / need.

If Ford can't sell us petrol engines, they'll sell us electric motors instead. If BP can't sell us oil, they'll sell us wind- or solar- or nuclear power. In fact, the current drive to be "green"* presents them with enormous possibilities for expansion and new markets.






* Incidentally, all that CO2 does technically make the world a whole lot greener cos plant life is thriving from it: http://www.csiro.au/en/News/News-releases/2013/Deserts-greening-from-rising-CO2

So maybe the Green movement should choose a new colour?

alderpoint

It was absolutely inevitable that excise duty for "green" cars would have to rise. With the continued efficiency of cars meaning that more and more cars are in the lower bands, the total tax take would decline dramatically over time. This is money that the government can't afford to be without, hence so the rise in duty.

peter_the_piper

I'm just glad they did not put an incremental rise on, £0 is quite useful to an oap.