Diesel car tax hike to fund government air quality plans
The Government’s ban on the sale of new petrol and diesel cars is the culmination of ambitious air quality plans, which will be funded by a hike in taxes on diesels or a shuffling of existing funds
The Government will increase taxes on diesel cars in order to fund its air quality plans, which culminate in ban on internal combustion-engined cars from 2040 unless other existing funds can be ‘reprioritised’.
The funds will be dished out to local authorities, for more local air quality measures such as the proposed abolishment of speed humps and air quality-decreasing traffic calming measures. The ban, which will abolish sales of all new petrol and diesel cars (but not hybrids or plug-in hybrids) is the culmination of a period of intensifying anti-fossil-fuel and pro-air-quality rhetoric.
It’s not yet known how much the taxes would amount to for each diesel driver, but they would be in addition to the £10 T-Charge, which was announced earlier this year to discourage diesel drivers from already polluted city centres, as well as other levies to discourage drivers out of diesels. The current method of taxation for covers both petrol and diesel cars, with first-year charges ranging from £10 to £2000 depending on the car’s CO2 output. After this, all cars have the same £140 rate of tax, whatever their emissions. Zero-emissions cars under £40,000 go free.
The Government will announce the measures later this year, likely in the autumn budget statement. The detail has fuelled further speculation of the end of diesels in the UK, from used car buyers ditching them in the wake of higher taxes and charges, as well as through the Government’s planned scrappage scheme, and new buyers snubbing them in favour of petrol, petrol-electric hybrids and pure EVs.
This tax hike would be another blow for the Government’s latest VED scheme. These new VED rules have already faced criticism for inadvertently penalising more expensive hybrids out of contention with traditional petrol and diesel cars through a £310 annual ‘premium fee’ for cars with a list price of more than £40,000 for the first five years of the car’s life, no matter what its emissions.
Source: Autocar Online