The government’s new approach to the car tax system is putting motorists off buying low emission vehicles, according to a new study from the AA.
Around three in five motorists who took part in the study said that they found “little to no incentive” to buy eco-friendly cars after the government overhauled the Vehicle Excise Duty (VED) charges.
Under the current system, drivers of low emissions vehicles benefit from free road tax, but from April 2017 onwards all motorists will be subject to a £140 flat fee unless their car emits no CO2 at all.
As a result, the number of car models exempt from paying annual car tax has plummeted from 445 to just 13 as the government makes efforts to prevent a loss of tax revenue.
Edmund King, president of the AA, said: “The current graduated VED system works well and encourages drivers to opt for more fuel-efficient vehicles.
“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.”
He added: “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.”
Other changes to the system include an additional first years’ fee depending on how much CO2 a car emits, along with an additional £310 payment for premium cars costing £40,000 or more.
Luckily, however, the changes won’t be introduced until 2017, and any car registered before April that year will continue to pay the same amount of tax as under the current scheme.
