AA urges car tax re-think

14 February, 2017

Tax changes that penalise drivers of low emission vehicles and benefit higher emission cars should be dropped, the AA is urging.

From April 1 any new vehicle which emits more than 1g per km of CO2 will pay a standard car tax rate of £140 per year after the first year.

On top of that, owners of vehicles which have a list price of more than £40,000 will have to pay an additional charge of £310 for five years after the first year rate.

The changes mean that vehicles like the Toyota Prius hybrid with CO2 emissions of 70g per km, which currently costs nothing to tax, is now in line for a £725 car tax bill over the first six years.

In contrast, a much less fuel efficient vehicle like a Long Wheel Base Mitsubishi Shogun 4X4 (245g per km CO2), while having a first year rate of £1,700 under the new scheme, will see a reduction in its overall car tax bill of £985 over the same period compared with the tax that would be paid under the current system.

AA president Edmund King said: “Both the Government and our members say that improving air quality is of vital importance, but the imposed changes to car tax are counter-intuitive to the challenge.

“Rather than providing incentives for motorists and encouraging them to get into cleaner, less polluting cars the changes are forcing higher tax bills on those that choose greener cars.

“It seems perverse that a buyer of a high emission vehicle could actually see an overall reduction in their tax bill when compared to a cleaner car.

“With the Budget due in March, we call on the new Chancellor to reconsider these proposals. Past schemes have shown that incentives that encourage the take-up of cleaner, greener cars can work.”

The new scheme will only apply to cars purchased after April 1, so the AA is advising motorists who will be buying a car in the next few months to check the Vehicle Excise Duty (VED) as they may wish to adjust the timing of the purchase.

King said: “If you’ve got a new car on order, especially if the delivery date is around the end of March or beginning of April, we’d advise checking the cost of VED under both schemes.

“Moving the delivery date, either forwards or backwards, depending on the car, could save you hundreds of pounds.”

Keywords: emissions, AA, tax, VED




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