Currently reading: Government U-turn over road tax
Chancellor expected to announce rethink over proposed VED banding

The government has delayed its controversial plans for a vast increase in road tax.

The last budget set out a scheme for above-inflation rises in Vehicle Excise Duty (VED), described by the Chancellor Alistair Darling as a “green tax” for post-2001 cars with higher CO2 emissions.

Now the Chancellor is expected to announce a rethink of the VED rises in next week’s pre-budget report. It’s being seen as a significant climb-down.

As well as raising road tax for drivers of so-called ‘gas guzzlers’, the proposals would have stung drivers of conventional family saloons like the Ford Mondeo, with retrospective tax rises of up to £245 a year.

Any vehicles registered before 2001 with an engine displacement larger than three litres would also have been charged at the highest rate.

Although it’s likely the reforms will still apply to new vehicles, substantial rises in VED for vehicles registered between 2001-2006 are likely to be postponed for at least a year.

It’s part of the government’s effort to improve its negative opinion poll ratings and stave off a rebellion from Labour backbenchers. Experts had suggested the retrospective changes would have affected around 70 per cent of Britain’s motorists.

“We would welcome the postponement of these road tax rises,” Elizabeth Dainton of the RAC Foundation told Autocar. “We were very much against the retrospective aspect of these revisions, which caused worry and concern for motorists.”

“Reassurance for drivers and the used car market in these times of economic uncertainty has to be a good thing. But postponing this for just one year perhaps isn’t enough.”

The AA was also against the retrospective VED changes. It argued that increasing VED for post-2001 vehicles would make some cars almost impossible to sell on.

Will Powell

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ordinary bloke 12 November 2008

Re: Government U-turn over road tax

daven2505 wrote:
due mainly to the scare stories that it will cost £440 to tax it from next April
Whilst I appreciate that it is a large increase to have to pay out each year, surely in comparison with the overall costs of running a car (taking into account fuel, insurance, servicing, tyres and depreciation) even £440 a year is not so onerous that you would wish to sustain a loss of £4000-£5000 by selling the car. That's 8 or 9 years VED, possibly.

ordinary bloke 12 November 2008

Re: Government U-turn over road tax

daven2505 wrote:
can some one tell me why British police forces/Avon & Somerset are buying German X5's
I quite agree. This is a disgraceful situation. I believe that this is partly caused by the police authorities (like many other state bodies) being required to obtain tenders for the acquisition of their motor vehicles (and other equipment) from any EU member state. They are not allowed to restrict it to just British-built vehicles. As in many other spheres, the British government insists that this actually happens, whereas the majority of EU members turn a blind eye, after all when did you last see a Range Rover patrolling the German autobahns or anything other than a Renault, Peugeot or Citroen on the autoroutes and by-ways of France ? Its just another example of the "gold-plating" tendency of our legislators.

ordinary bloke 12 November 2008

Re: Government U-turn over road tax

Autocar wrote:
The government has delayed its controversial plans for a vast increase in road tax
I believe that the important word above is "delayed". I can't see this government passing up the opportunity to extract more tax from the motorist in due course. I am guessing that increases in VED will be sneaked in eventually if only to offset the loss in revenue caused by people driving their cars fewer miles or buying smaller more fuel-efficient cars.