7 days left to avoid higher car tax bills

Costs for new vehicles to soar... even if they’re green

‘It will discourage low emissions cars’

MILLIONS of motorists who buy a new car from next Saturday will be clobbered with higher vehicle duty as part of a £ 5billion tax grab by the government.

Even drivers of greener cars like the Toyota Prius, who currently pay no vehicle tax at all, will have to pay £665 over the first six years under the new system.

Those who buy modest, low emission family cars will also pay hundreds of pounds more.

The car industry has warned that most people are oblivious to the tax hikes which come into force on April 1. The shake-up is happening because car manufacturers have been building cleaner cars.

As the current tax regime is based on carbon dioxide emissions, it means the tax take has fallen.

The new system is forecast to raise £4.8billion for the Treasury over five years. It will not affect cars that are registered before April 1.

Vehicle tax will continue to be based on C02 emissions, but only for the first year – after that it will fall to a flat rate based on the type of vehicle.

Owners of petrol or diesel vehicles will pay a flat annual rate of £140, while drivers of hybrids such as the Toyota Prius will receive a discount of just £10, paying £130 a year.

Those who buy expensive cars worth more than £40,000 will be hammered with an additional rate of £310 a year for the first five years – totalling £450 a year.

Electric cars will continue to incur no tax, as the government tries to encourage people to switch to zero emissions engines. But motoring campaigners have complained the new system is unfair and will actively discourage people from buying low emissions cars like hybrids. They point out that some inefficient cars with big engines will actually incur less tax while those who buy smaller, less polluting cars such as Ford Fiestas and low emissions hybrids will pay more.

Motoring group RAC last night said anyone thinking of buying a new car should do so in the next few days to escape the charges.

Vehicle Excise Duty (VED) is currently based on carbon dioxide emissions. The lower the emissions the less you pay. Former chancellor George Osborne announced the shake-up of vehicle excise duty in the summer budget of 2015.

Mr Osborne said that by 2017 over three quarters of new cars will pay no VED at all in the first year, and said it was unsustainable and unfair that people who can afford a new car pay less than those who can only afford a second hand, less fuel efficient car.

Nick Lyes, roads policy spokesman from the RAC, said anyone in the market for a new car ‘should be pounding the streets visiting dealerships this weekend to avoid paying hundreds more in VED over the next few years’.

He added: ‘The Government must recognise that the new VED rates could actually be a barrier to the take up of low emission vehicles, so we would encourage them to either look again at these rates as soon as possible or provide extra support for those motorists who wish to switch to lower emissions cars.’

Howard Cox, founder of FairFue-lUK said: ‘VED rate changes in April are a complete deterrent to buying low emissions cars.’

While Charlie Elphicke, a Tory member of the Public Accounts Committee, said electric cars were a long way off being a viable option for many motorists.

He said: ‘It’s really important to encourage low emission and hybrid cars. So it’s hard to understand why vehicle excise duty is being increased on them.’