Paul Barker's blog: 23 September - Road tax needs another look
23 September 2015
A couple of influential industry figures have begun to pop their head over the parapet and express their dissatisfaction with the Government's VED changes, announced in July's emergency Budget that followed the General Election (see story)
I've expressed my amazement in the past that, aside from zero-emission models, every five-year old car will pay the same amount of VED, regardless of whether it's a 37g/km plug-in Audi A3 E-tron or a 393g/km Bentley Mulsanne.
Yes, there will be a hefty difference in first-year VED figures, and for years two to five the annual road tax will be £310 more expensive on cars over £40k, but for used drivers, there's absolutely no VED incentive to go into a more efficient model - which seems somewhere between a missed opportunity and negligent.
But the effect on the used market will be interesting if the Government doesn't have one of its famous changes of heart (see tax, caravan and tax, pasty in recent times). In early 2017, there's plenty of reason to be registering cars under 100g/km, as their VED will jump from the current zero rate to £140 per year that April, which would have a major impact on how appealing they will be to used buyers. Likewise, at the other end of the scale expensive and polluting models will, aside from the even heftier first-year payment, be much cheaper to tax than the £505 per year the aforementioned five-year old Bentley currently costs.
The Government has obviously lost revenues by being too generous/not attentive enough as car companies rapidly cut CO2, but a tightening of the graduated bandings designed to promote lower emissions but still claw back funds would have made sense.
This new system has everyone scratching their heads wondering how and why it was devised, and whether the penny will drop, and modifications be made, before the industry has to begin planning for the upfront sales and RV consequences