Chancellor hits gas-guzzling carsBut road tax for most petrol cars also goes up

21 March 2007

 

Chancellor Gordon Brown has announced hard-hitting tax measures for drivers of so-called ‘gas-guzzling’ cars.

The annual cost of Vehicle Excise Duty (road tax) for the most polluting vehicles in band G will rise by £90 to £300. This will be followed by a further rise to £400 in April 2008.

This rise will affect many 4x4s, even the more efficient diesel versions such as the Jeep Grand Cherokee 3.0 diesel and the Land Rover Discovery 2.7 diesel.

But it will also hit sportier petrol and diesel cars such as the 3.2 litre Audi TT and the the Jaguar XK Coupé..

Fuel duty rates

Vehicles in the next most polluting band will rise by £10 to £200 per year.

The Chancellor has also abolished the split between fuel duty rates for petrol and diesel vehicles, with all petrol car VED rates rising around £5 to £10 to meet their diesel equivalents.

This means, for example, that a 2006 Vauxhall Astra 1.6 petrol will now rise from £125 to meet the diesel rate at £135. On top of this, all VED rates will rise annually by £5 for the next three years.

But it’s not all bad news for motorists.

Hybrid cars

Environmentally-aware diesel cars, currently sitting in band B, are to enjoy a 30 per cent cut in VED – down from £50 to £35.  Cars benefiting from this cut include the Citroen C1 diesel, Peugeot 207 1.4 HDI and the Toyota Yaris 1.4 D-4D.

But motorists who have chosen hybrid cars such as the Toyota Prius and Honda Civic hybrid will save just £5 (from £40 to £35) over the previous rate, thanks to the aligning of petrol and diesel rates.

Fuel duty itself, which has been frozen since the fuel demonstrations of September 2000, is set to rise by 2p in October, followed by a further 2p in 2008, and again by 1.8p in 2009.

‘Mondeo Man’

This means that by 2009 a driver of 2006 Ford Mondeo 1.8 LX will be paying an extra £3.39 in fuel duty to fill up their tank.

Which? Motoring Researcher George Marshall-Thornhill said: ‘We’re disappointed that today’s budget speech did not include incentives to encourage more environmentally responsible motoring.

‘Mr Brown is keen to emphasise the zero-rate VED for vehicles that emit less than 100g/km, yet there are currently no cars (other than electric cars) on sale in the UK that fall within this limit.

‘And drivers of petrol cars in band B will actually pay just £5 less for their efforts – which will be cancelled out by next April’s £5 rise across all bands.

‘We feel that the extra £90 collected for every band G car should go towards grants and other measures to help shift the UK vehicle stock to more efficient vehicles.’