Many of Britain’s motorists will pay a high price for cars getting ‘greener’ after George Osborne announced a major overhaul of road tax.
Drivers of eco-friendly hybrids and luxury vehicles will be hardest hit by the Chancellor’s reform of vehicle excise duty (VED).
Families said it was ‘madness’ that they could be hit with an annual bill of £900-a-year, but Mr Osborne pledged to spend the money on building and improving the nation’s major roads.
From April 2017 people who buy the dirtiest gas guzzlers will see the road tax they pay in the first year nearly double from £1,100 to £2,000.
After one year, all carbon-emitting cars will be taxed at a rate of £140, including low-emission vehicles such as the Toyota Prius, which currently attract zero road tax. Also, anyone who purchases a new car costing £40,000 or more will have to pay an additional annual surcharge of £310 from the second to sixth year after it is bought.
Car makers and motoring groups warned that the changes would have a detrimental effect on sales of eco-friendly hybrid vehicles and on the demand for UK-built luxury cars. At present 70 per cent of all new car buyers – some 1.7million a year – pay no road tax because their vehicle’s emissions are so low.
But in future, only drivers who buy a car that emits no CO2 emissions, such as those that run purely on electricity or hydrogen, will enjoy a zero rate of VED.
Mr Osborne argued that middle-class motorists with ‘green’ but expensive cars have been able to avoid road tax while poorer families driving older and dirtier models are paying hundreds of pounds a year.