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BUDGET 2008: Big penalties for higher-polluting cars amid sweeping VED changes
Date: 12 March 2008
New cars that emit more than 255g/km will be hit by a £950 first year Vehicle Excise Duty bill from 2010 as part of large-scale changes to VED aimed at driving people towards lower-emitting cars.
At the same time, models under 131g/km will be handed a free first year's road tax, while models between 131-160g/km will be charged at the same banded levels as older vehicles with the same emissions figures.
After the first year, all new models will fall into their respective CO2-influenced VED bands.
But before that, six new VED bands will be introduced next year to make a total of 13, including a new M banding for very high polluters emitting more than 255g/km.
At the moment, the top G band covers everything over 225g/km.
Next year's reforms will also see a reduction for all new and existing cars that emit less than 151g/km, but an increase to £440 on the highest polluters, cars over 255g/km. That rises to £455 in 2010.
In an aside, alternatively fuelled cars such as hybrids and LPG models will find their discount gradually eroded to £15 in 2009/10, £10 in 2010/11 and removed completely in favour of a technology-neutral CO2-based system in 2011.
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