Owners of the most-polluting vehicles will be stung by increased taxes, but it’s not as bad as it might have been.
As predicted, Chancellor Gordon Brown announced measures in the Budget today that will hit owners of vehicles that produce over 225g/km of CO2.
The rate of Vehicle Excise Duty – commonly known as Road Tax – for vehicles that emit over 225g/km of Co2 will be increased from the current £210 for petrol cars to £300. In April 2008 this will increase again to £400 a year.
At the other end of the spectrum, the tax on some of the least-polluting vehicles – those that produce between 101 and 120g/km – has been reduced by a whopping £5 to £35 for petrol cars, and by £25 to £15 for ‘alternative fuel vehicles’. We’re assuming this last category doesn’t include the petrol-powered Toyota Prius.
Fuel duty is also to rise, by 2p per litre from October, in line with inflation.
While we can’t say that we support Brown’s punatative taxes, adding the cost of about a tank and a half of fuel to the yearly running costs of the most-polluting vehicles is hardly likely to stop anyone using them.