‘Green taxes’ on diesel cars to hit three million drivers

Measures announced to improve air quality by getting most-polluting vehicles off the roads

NEARLY three million diesel car drivers will be hit with new “green taxes” from next year under measures announced yesterday to phase out polluting vehicles.

The new higher taxes will affect around 800,000 drivers of diesel company cars and two million buyers of new diesel cars from April next year, the Treasury said. It is an extension of the Government’s plan to improve air quality by discouraging people from buying diesel cars that pollute the air with harmful fumes.

Drivers who choose to buy new diesel cars that do not meet the latest emissions standards will be charged a one-off levy through being forced into a higher vehicle exercise duty band.

Under the change, the VED rate they pay in the first year after purchase will be calculated as if they were in the VED band above. It means they will pay an extra one-off amount of between £20 and £500.

For example, someone buying a Ford Fiesta today will pay £120 VED in their first year, but if they bought it in April 2018 they would pay £140.

The Treasury estimates that the move will affect around two million drivers over the next five years, raising around £125 million in the first year, with revenues falling in later years as people buy fewer polluting diesels.

The extra tax will not apply to nextgeneration clean diesels, which are certified as meeting emissions limits in tests under a standard called “Real Driving Emissions Step 2”, which does not come in until 2020.

As a result, it is expected that all diesel cars sold in April next year will be hit with the extra tax.

In addition to the tax on new diesels around 800,000 drivers of diesel company cars will see the annual company car tax they pay increase from 3 per cent to 4 per cent of the purchase value of their car.

It means an employee with a £30,000 diesel car would see their an-

nual diesel supplement tax rise by £300 a year, from £900 to £1,200.

The Treasury said that, because around 350,000 company car drivers a year replace their cars, within a few years most affected drivers would have an opportunity to switch to non-diesel cars. Drivers of polluting older diesels which are not company cars, and van drivers, are not affected by the new measures.

A spokesman at the Society of Motor Manufacturers, which represents the car industry, said it was “unrealistic” to expect car makers to be ready to produce cars that meet the new standards by April.

He said: “Manufacturers are investing heavily in the latest low-emission technology. However, it’s unrealistic to think that we can fast-track the introduction of the next generation of clean diesel technology, which takes years to develop, in just four months.

“This Budget will also do nothing to remove the oldest, most polluting vehicles from our roads in the coming years.”

However, in a welcome boost to drivers, fuel duty will be frozen for the eighth consecutive year.

Fuel duty freezes since 2011 will have saved the average driver £850 by April 2019, the Government claims.

Electric and driverless cars also got a £500 million boost as Philip Hammond, the Chancellor, laid out plans for the future of Britain’s roads.

As part of the measures, red tape will be slashed to allow tech firms to test driverless vehicles on public roads by 2021.