Drastic car tax changes could see some motorists pay more than £2,000 every year
Car tax changes may soon come into effect where the most polluting cars pay the same rate of tax each year as they did in the first one. This could see some drivers of heavy polluting vehicles pay over £2,000 per year while owners of electric cars pay nothing.
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The proposals were hidden in the budget document where plans for a consultation to abolish the flat-rate tax system are discussed.
As things stand only your first year car tax rate is based on the amount of pollution your car generates.
This is then swapped for a standard rate on all vehicles from the second year onwards with identical costs for low and high polluting cars.
However, the plans would see car tax charges directly relate to the amount of carbon dioxide a car emits which could boost take-up of cheaper options.
The consultation suggests the change could even be backdated and would impact anyone who has purchased a new car since 1 April 2017.
Other proposals currently being considered include extending the first year rates for an extra few years.
This could see motorists paying higher charges into year two and three before switching to a cheaper rate at a later date.
Another idea tabled is to replace the standard rate with two prices for cars above and below emissions of 150g/km.
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Those vehicles with higher readings will be forced to pay a higher sty charge with less polluting models paying a cheaper value.
The proposals also state older diesel models could be forced to pay an extra VED supplement.
This would ensure owners of higher polluting cars paid higher charges than cleaner models.
Changes are also being considered to the first year system which could see drivers charged for their exact carbon outputs.
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Under the current system motorists are put into differing tax bands but there is often a dramatic difference between cars at the lower and higher ends of each band.
The system would see some road motorists car tax charges fall, while those with heavily polluting cars could see a rise.
The government believes VED charges should send a signal to individuals as part of the transition to electric cars.
The changes are linked to the government’s proposed ban on the sale of brand new petrol and diesel cars by 2035.
The document says: “As we move towards these targets, the government would therefore like to explore ways of improving the ability of Vehicle Excise Duty to incentivise lower-emission car purchases.
“Specifically, the government wants to understand how the VED regime influences individuals and fleet car purchasers when deciding which vehicle to purchase, and what bearing it has on manufacturers when deciding which models to produce.”
Car tax costs have already been heavily updated for 2020 with trayes now staeb under the more accurate Worldwide Harmonised Light vehicles Procedures (WLTP) rules.
These offer more accurate emissions readings than the previous New European Driving Cycle (NEDC) system meaning costs have risen for many motorists.
However, AA President Edmund King says mtorosts should not be punished retrospectively with added charges.
He claims added charges should only be introduced on new cars and not catch out motorists who buy a vehicle in “good faith”.
Speaking to Express.co.uk, Mr King said: “None of these changes should be retrospective.
“If someone bought a petrol or diesel car, whatever the vehicle, using good faith and they knew what the tax was.
“It is not right of the government to go back some time later and disproportionately charge them more.”
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