Road tax hike will hit older carsGreen duties will apply to cars up to 7 years old

01 May 2008

Thousands of families are facing a surprise tax hike after the government confirmed that cars up to seven years old would be subject to new road duties.

It was widely believed that older vehicles would be exempted from the shake-up, which is designed to penalise high emissions.

However, the Treasury said that owners of larger cars bought since March 2001 would be hit.

Budget 

A spokeswoman denied that the move had been slipped through 'on the quiet', but admitted that last month's Budget had not 'spelt it out'.

'It's not as clear in the Budget as it could be,' she said. 'It's not explicitly spelt out.'

News of the unexpected levy is likely to cause fury among motorists amid soaring costs for fuel and other essentials.

Petrol price hikes

Some experts estimate that the Exchequer is already set to benefit from an extra £2bn in revenue this year thanks to high petrol and diesel prices.

Under the new road tax system, there will be 13 bands ranging from A to M, with vehicles being classed based on their carbon emissions. New cars will also be subject to a so-called 'showroom rate'.

Chancellor Alistair Darling said the changes would come into effect from next April, and raise an additional £1.2bn in revenue by March 2011.

Renault and Vauxhall

However, critics insist he failed to make clear that much of this money would come from older cars.

They say owners of vehicles that emit more than 225g of carbon dioxide per kilometre - including some models of Renault Espace and Vauxhall Zafira - will pay £430 in duty in 2010, compared to £210 this year.

£430

Cars that emit more than 225g of CO2 per km will pay this in duty in 2010

The rise will be staggered, moving to £300 next year before reaching the top rate.

Ford Mondeo

Medium-sized cars that emit more than 180g/km - including some Ford Mondeo models - could see increases of up to £100 over the same period, it is claimed.

Paul Watters, head of roads policy at the AA, told The Times: 'The government presented the changes as means of influencing people's purchasing decisions, but it turns out that they are also penalising hard-pressed families who have been running the same car for many years.'

A Treasury spokeswoman said the road tax reform would 'further strengthen environmental incentives to purchase and develop fuel efficient cars.

'The government's position on Vehicle Excise Duty remains as set out by the Chancellor in his Budget statement to Parliament,' she said.

Revised bands

'The press notices on the Treasury website released shortly after the Budget set out the full detail of the revised bands and the changes.

'As a result of the Budget nearly half of new car buyers will be better off and around 70% of new car buyers are no worse off in 2009.

'Around 60% of existing drivers are no worse off in 2009 - indeed, approximately a third are better off.'

Road tax reform

A Treasury spokeswoman said the road tax reform would 'further strengthen environmental incentives to purchase and develop fuel efficient cars'.

'The government's position on Vehicle Excise Duty remains as set out by the Chancellor in his Budget statement to Parliament,' she said.

'The press notices on the Treasury website released shortly after the Budget set out the full detail of the revised bands and the changes.

'As a result of the Budget nearly half of new car buyers will be better off and around 70% of new car buyers are no worse off in 2009.

'Around 60% of existing drivers are no worse off in 2009 - indeed, approximately a third are better off.'

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