Doubled the rate of first year VED for higher polluting cars
The Autumn Budget included changes to Vehicle Excise Duty and extended benefit-in-kind rates
Doubled the rate of first year VED for higher polluting cars
16th in the ranking for the first year VED of a BMW X5
The Autumn Budget revealed some promising green moves on tax policy as relating to road transport. Vehicle Excise Duty will be reformed to widen the "tax gap" between battery-electric vehicles and fossil fuel cars, making EVs a more attrractive prospect for buyers.
But the changes don't go far enough. This is a positive signal from government but to truly address the damage bigger, more-polluting vehicles cause, the government is going to have to get much bolder with its tax policy.
Benefit-in-kind schemes saw the beneficial rates for battery-electric vehicles extended and say an uplift for plug-in hybrids, meaning that some of the real-world emissions that PHEVs produce will be addressed slightly more. The government could make real progress however, by ensuring that first year VED more accurately reflects the damage PHEVs are doing to the climate as well.
SUVs are still a big (and getting bigger) problem in the UK. We need to see a first year VED rises targeted at the heaviest 10% of new non-zero emission cars and the heaviest 5% of new BEVs.
Even with the new Vehicle Excise Duty rates introduced this year, UK drivers pay some of the lowest tax rates in Europe on big polluting SUVs.
Extended flexibilities will erode business case for automotive industry and delay affordable EVs.
Government must stand firm against calls to water down the law and instead focus on delivering a robust industrial strategy.