Vehicle Excise Duty increases:more than 9m car owners will be worse-off, admits HM Treasury


Vehicle Excise Duty and CO2 emissions together are currently very much in the news. The above startling statistic has been admitted by the Treasury in a parliamentary answer. It has emerged that only 4.1 million motorists representing just 18% of the 21.9 million cars that will be on our roads by 2010/11 will be better-off. The Government believe over 9 million motorists will be worse off contrary to earlier official statements made at the time of the March budget.

From April 2010,the maximum VED will be £455 ( increased from £210) for the highest CO2 emitting vehicles registered between March 2001 and March 23,2006. Later registrations will also attract a higher duty.

Although the appliance of heavy VED rates to pre-2006 car registrations smacks of retrospective taxation (not good), the inescapable fact is that the Government is committed to tackling climate change(which is good) and sees raising money in this way the answer (debatable).The heavier polluting cars are, therefore,going to be subject to ever increasing taxes over the next few years. However painful,and many families are going to be seriously affected in the short run,it will eventually pay financially to keep abreast of emerging new car technology and new production models of the more environmentally-friendly cars.

In emphasising its commitment to more fuel-efficient cars and in turn reducing running costs, the Government has launched a consultation on the compulsory CO2 emission targets proposed by the European Commission.
The Government would like to see a longer term target of achieving 100g/km of CO2 by 2020.