Only zero emissions cars will be exempt from road tax under the new VED scheme

New car tax rules to hit low-emission vehicle uptake says survey

The UK's new car tax system will dissuade drivers from buying low-emission vehicles, according to a study by the AA.

Changes to Vehicle Excise Duty (VED) bands announced by the Government recently, which will come into force in April 2017, will see the number of car models exempt from paying the standard £140 annual car tax go from 445 to 13.

A survey carried out by the motoring association found that about three out of five motorists who took part in the study said there is now "little or no incentive" to buy low CO2 emission cars.

"The current graduated VED system works well and encourages drivers to opt for more fuel-efficient vehicles," said AA president Edmund King. "Whilst our members realised that the system needed to be reformed, they think the proposed system will not encourage the take up of lower-emission vehicles.

"In the new VED system, only pure electric or hydrogen fuel-cell cars will qualify for the lowest band. We believe the current system could have been reviewed to give more incentives for those that opt for lower-emission vehicles."

For cars registered after 1 April 2017, the VED will be transformed into three bands - zero, standard and premium - and chancellor George Osborne said the 'standard' charge of £140 would cover 95 per cent of all cars.

The Government has said the plans are designed to incentivise consumers to buy the very cleanest zero-emissions vehicles, but the AA’s poll suggested 59 per cent of drivers thought the VED changes penalised low-CO2 petrol cars and hybrids.

Vehicles that cost more than £40,000 to buy will also be subject to an additional £310 supplement for five years, though cars registered before April 2017 will continue to pay under the current scheme.

The decision is that latest in a line of revisions to green policies that will also see subsidies to onshore wind, commercial solar power, and industrial biomass burning cut, as well as the scrapping of the Green Deal scheme designed to persuade homeowners to insulate their houses.

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