Having just driven the new Smart diesel it’s brought home how far off the pace the Government is with its ‘green’ taxation.
To explain, benefit-in-kind taxation is based on CO2 emissions, and until now it’s been very effective at persuading buyers to pick, and manufacturers to offer, more efficient cars.
However, we’re now at a point where there are plenty of cars below the entry level 120g/km and 10% BIK band (+3% if it’s a diesel).
The result is that a car that’s as frugal and low emitting as the Smart with emissions of 88g/km is lumped into the same banding as a car with 25% higher emissions at 120g/km.
The current BIK tax system is too blunt an instrument at the bottom end of the scale and doesn’t encourage car makers to be any greener than 120g/km.
Darling – it’s time to introduce some incentives, and this year’s Budget is the time to do it.
