What the Budget means for motorists - Express.co.uk
The Chancellor surprised motorists by overhauling the taxation system for drivers for the first time since 2005, when the current CO2-based taxation system was introduced. From 2017, all new cars will be taxed on the basis of just three VED bands – zero, standard and premium. The amount the owner has to pay will be calculated on the basis of not only the CO2 emissions, but also the list price of the car. The tax on existing cars will remain as it is, with the Chancellor saying: “There will be no change to VED for existing cars – no one will pay more in tax than they do today for the car they already own. Reaction to the change has been mixed, with Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, saying that the change “came as a surprise and is of considerable concern. “While we are pleased that zero-emission cars will, on the whole, remain exempt from VED, the new regime will disincentivise take up of low emission vehicles. “One is that new car prices have dropped in real terms over many years and the other is that money raised from VED will be ring-fenced for road investment, something not seen since the 1930s. ”. 2. Ring-fencing of VED revenue. Source: www.express.co.uk
