One-off £23,000 charge on gas-guzzlers
Discussion
The Telegraph said:
Gas-guzzling sportscars to receive purchase tax of up to £23,000
Buyers of large-engine vehicles would face a new purchase tax of up to £23,000 under plans drawn up by a government adviser.
Buyers of gas-guzzling sportscars and other large-engine vehicles would face a new purchase tax of up to £23,000 under plans drawn up by a government adviser and backed by a Cabinet minister.
Even the price of some small cars would rise by more than £1,500 in exchange for the abolition of annual Vehicle Excise Duty payments.
However, buyers of new small efficient cars would get a government subsidy of up to £750, under the proposed rules, which are being promoted by the Liberal Democrats.
The proposals for vehicle taxation come as the Treasury considers the best way to reform or replace VED to respond to the increasing fuel efficiency of modern cars.
The plan is put forward today in a think-tank paper written by Tim Leunig, who has recently been appointed a special adviser to the Government.
Mr Leunig’s paper for the Centre Forum think-tank – written before his appointment -- has been backed by Ed Davey, the Energy Secretary.
The proposed scheme would work by imposing a new one-off purchase tax on the cars with engines that produce large volumes of CO2 and other pollution. Some of the money raised would then be used to subsidise the purchase-price of the most efficient cars.
Mr Leunig argues that the scheme would create a much stronger incentive for manufacturers to develop efficient cars and for motorists to buy them.
He estimates that choosing a more efficient car could cut fuel use by around 450 gallons over a 100,000 mile lifetime, saving motorists around £2,700.
The most-polluting cars would attract very large tariffs, with some Aston Martin models facing a new sales charge of £23,050.
Around 150 luxury models -- with total annual sales of around 5400 cars --would face a first registration fee of £10,000 or more, the report estimates.
However, the price of low-price cars could also change significantly under the new policy.
For instance, the purchase price of a 1.25 litre petrol Ford Fiesta would rise from £9,084 today to £10,734. By contrast, a 1.6 litre diesel model of the same car would become cheaper, falling from £11,845 to £11,495.
Vehicles that currently have similar prices would diverge sharply under the new rules, Mr Leunig suggests. For example, he cites Ford and Chrysler people-carriers, currently both on sale for around £28,000.
Under the new scheme, the Chrysler would be £3950 more expensive than the Ford, because it has much higher emissions.
The biggest up-front subsidy of £750 would be applied to cars including the Toyota Yaris.
Mr Davey endorsed the report, saying: "I welcome this report. It is exactly the sort of innovative thinking we have come to expect from Centre Forum."
Mr Leunig said: "More efficient cars save motorists money and reduce global warming. What's not to like?"
The Daily Telegraph revealed earlier this year that government officials have begun private discussions with the motoring industry and drivers’ groups about an overhaul of the VED rules.
The talks come as ministers try to prevent a fall in tax revenues as more motorists choose smaller, cleaner cars that incur a lower rate of duty. Labour has accused the Coalition of planning a “stealth tax” on drivers, effectively punishing them for going green.
Ministers say that while they have not finalised their plans, changes may be necessary to ensure the “sustainability of the public finances”.
Annual VED charges currently raise almost £6 billion a year for the Treasury, but official forecasts show that the revenue from the tax will fall as more people chose to drive low-emission cars.
Road tax rules give drivers a financial incentive to choose low-emission vehicles, as cleaner cars qualify for lower rates of VED.
The Office of Budget Responsibility this year cut its forecast for VED revenues by £100 million a year from 2014/15 to reflect the move towards cleaner cars.
http://www.telegraph.co.uk/news/9582183/Gas-guzzling-sportscars-to-receive-purchase-tax-of-up-to-23000.htmlBuyers of large-engine vehicles would face a new purchase tax of up to £23,000 under plans drawn up by a government adviser.
Buyers of gas-guzzling sportscars and other large-engine vehicles would face a new purchase tax of up to £23,000 under plans drawn up by a government adviser and backed by a Cabinet minister.
Even the price of some small cars would rise by more than £1,500 in exchange for the abolition of annual Vehicle Excise Duty payments.
However, buyers of new small efficient cars would get a government subsidy of up to £750, under the proposed rules, which are being promoted by the Liberal Democrats.
The proposals for vehicle taxation come as the Treasury considers the best way to reform or replace VED to respond to the increasing fuel efficiency of modern cars.
The plan is put forward today in a think-tank paper written by Tim Leunig, who has recently been appointed a special adviser to the Government.
Mr Leunig’s paper for the Centre Forum think-tank – written before his appointment -- has been backed by Ed Davey, the Energy Secretary.
The proposed scheme would work by imposing a new one-off purchase tax on the cars with engines that produce large volumes of CO2 and other pollution. Some of the money raised would then be used to subsidise the purchase-price of the most efficient cars.
Mr Leunig argues that the scheme would create a much stronger incentive for manufacturers to develop efficient cars and for motorists to buy them.
He estimates that choosing a more efficient car could cut fuel use by around 450 gallons over a 100,000 mile lifetime, saving motorists around £2,700.
The most-polluting cars would attract very large tariffs, with some Aston Martin models facing a new sales charge of £23,050.
Around 150 luxury models -- with total annual sales of around 5400 cars --would face a first registration fee of £10,000 or more, the report estimates.
However, the price of low-price cars could also change significantly under the new policy.
For instance, the purchase price of a 1.25 litre petrol Ford Fiesta would rise from £9,084 today to £10,734. By contrast, a 1.6 litre diesel model of the same car would become cheaper, falling from £11,845 to £11,495.
Vehicles that currently have similar prices would diverge sharply under the new rules, Mr Leunig suggests. For example, he cites Ford and Chrysler people-carriers, currently both on sale for around £28,000.
Under the new scheme, the Chrysler would be £3950 more expensive than the Ford, because it has much higher emissions.
The biggest up-front subsidy of £750 would be applied to cars including the Toyota Yaris.
Mr Davey endorsed the report, saying: "I welcome this report. It is exactly the sort of innovative thinking we have come to expect from Centre Forum."
Mr Leunig said: "More efficient cars save motorists money and reduce global warming. What's not to like?"
The Daily Telegraph revealed earlier this year that government officials have begun private discussions with the motoring industry and drivers’ groups about an overhaul of the VED rules.
The talks come as ministers try to prevent a fall in tax revenues as more motorists choose smaller, cleaner cars that incur a lower rate of duty. Labour has accused the Coalition of planning a “stealth tax” on drivers, effectively punishing them for going green.
Ministers say that while they have not finalised their plans, changes may be necessary to ensure the “sustainability of the public finances”.
Annual VED charges currently raise almost £6 billion a year for the Treasury, but official forecasts show that the revenue from the tax will fall as more people chose to drive low-emission cars.
Road tax rules give drivers a financial incentive to choose low-emission vehicles, as cleaner cars qualify for lower rates of VED.
The Office of Budget Responsibility this year cut its forecast for VED revenues by £100 million a year from 2014/15 to reflect the move towards cleaner cars.
Yay Coalition!
Lastly - how EXACTLY does taxing something make it
- less damaging to the environment
- less likely to kill you
- improve traffic flow
?
unless EVERY penny is being used to invest in improving the current situation. which it isnt. its just used to plug the ever increasing hole that is spunked with red tape, do-gooders, middle management, reports and over average annual wages and crazy bonus schemes.
- less damaging to the environment
- less likely to kill you
- improve traffic flow
?
unless EVERY penny is being used to invest in improving the current situation. which it isnt. its just used to plug the ever increasing hole that is spunked with red tape, do-gooders, middle management, reports and over average annual wages and crazy bonus schemes.
Pixelpeep said:
Lastly - how EXACTLY does taxing something make it
- less damaging to the environment
- less likely to kill you
- improve traffic flow
?
unless EVERY penny is being used to invest in improving the current situation. which it isnt. its just used to plug the ever increasing hole that is spunked with red tape, do-gooders, middle management, reports and over average annual wages and crazy bonus schemes.
but it plugs a hole in a budget deficit - less damaging to the environment
- less likely to kill you
- improve traffic flow
?
unless EVERY penny is being used to invest in improving the current situation. which it isnt. its just used to plug the ever increasing hole that is spunked with red tape, do-gooders, middle management, reports and over average annual wages and crazy bonus schemes.
Sorry, didn't realise there's another thread in NPE about this:
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Doing better than mine...
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Doing better than mine...
superlightr said:
so my E63 AMG will go up in value as it already on the road and not subject to this tax.
No as you would still have to pay tax every year as you purchased it before this policy. Newer vehicles which would have paid this tax on purchase would retain higher value as essentially the tax has already been paid for the life of the vehicle.It will not cause any real hardship tothe folk who buy a new Aston etc, as they usually are either very rich, or the car is a company purchase - they buy the car rather than pay income tax.
The government will therefore pay this additional tax, and increase taxation on the rest of us to compensate themselves.
Just another hidden rise in taxation.
The government will therefore pay this additional tax, and increase taxation on the rest of us to compensate themselves.
Just another hidden rise in taxation.
The point is the government would get the money up front.
The big question is would this hurt Jaguar, Landrover, Rolls Royce, Aston Martin etc?
If (and this is a big if) they went for this eventually the few cars that would qualify on the old system would end up uneconomical to collect for. My guess is they'd make an offer of "buy your VED in one chunk" shortly before abolishing it
Of course we all know this fee would end up being charged in addition to VED.
The big question is would this hurt Jaguar, Landrover, Rolls Royce, Aston Martin etc?
If (and this is a big if) they went for this eventually the few cars that would qualify on the old system would end up uneconomical to collect for. My guess is they'd make an offer of "buy your VED in one chunk" shortly before abolishing it
Of course we all know this fee would end up being charged in addition to VED.
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