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Liberal Democrats back VED tax changes

Date: 17 October 2012   |   Author: Rachel Burgess

Firms with fleet vehicles emitting more than 94g/km could be paying more for Vehicle Excise Duty tax, following suggestions from a Government think tank, backed by the Liberal Democrats.

CentreForum is urging road tax changes that would see a charge of £50 for each gramme of carbon dioxide over 94g/km. The system would be a one-off charge and replace the current annual VED model.

Vehicles emitting 94g/km or less would also receive a Government subsidy of £750 on the new car price.

The price of a 1.25-litre petrol Ford Fiesta would rise from £9084 to £10,734 under the scheme, while the 1.6-litre diesel Fiesta would see its price fall from £11,845 to £11,495.

But larger cars that produce higher emissions would be hit, with owners of the highest-emitting Aston Martin One-77 paying a charge of £23,050 on top of the list price.

The scheme, which could cut total UK emissions by 2.5%, "gives every manufacturer an incentive to make every car more economical," according to CentreForum.

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