The AA is calling for the Government to rethink the new Vehicle Excise Duty system announced in last month’s summer Budget, claiming it could discourage motorists from opting for more eco-friendly vehicles and branding the new system as “premature”.
Head of roads policy, Paul Watters told BusinessCar “we are going to continue to highlight the new system’s weakness and advise car buyers to get low emissions models before 2017”, so that they can continue to benefit from the £0 tax band for sub-100g/km models.
The motoring body has been working with other automotive organisations including the DVLA and the BVRLA to encourage the Government to reassess how it taxes cars, following on from the success of the current VED system, which it claimed has led to a marked drop in average emissions figures.
While the current system sees drivers with cars emitting less than 100g/km of CO2 paying nothing for their annual car tax, graduated up to those with vehicles emitting more than 255g/km having to stump up £505 every year, the new system, which is set to come into effect on 1 April 2017 will see all except drivers of zero-emissions vehicles paying £140 per year.
Cars costing more than £40,000 will also be charged an annual £310 supplement for the
first five years.
It is only in the first year of registration that the lowest emitting vehicles will benefit from lower tax with rates varying from £10 for hybrids that emit less than 50g/km to £2000 for those that currently fall into the highest tax band.
As a result, the AA is concerned that the new system discourages motorists from opting for greener vehicles.
The AA claimed that the number of vehicles currently on sale that would fall into the lowest tax band will drop from 445 to just 13 models under the revised system, leading Watters to describe it as “premature”.
