Some models of new car could have to pay eye-watering VED car tax if the system becomes more closely connected to the CO2 emissions each vehicle pumps out.

Under new proposals, some drivers could pay up to £2135 a year, with high performance vehicles likely to be hit hardest. The latest budget had a huge focus on the measures taken to help the economy through the Covid-19 crisis, but hidden away amongst some of the finer details was news of a major change in the Vehicle Excise Duty system, changes which could see drivers of cars registered since April 2017 to pay over £2,000 a year for their road tax.

Vehicle Excise Duty is currently paid at a rate of between £0 and £2135 and therefore a flat rate of £145, plus £320 for cars over £40,000. The proposed changes, designed to encourage manufacturers and buyers to build and purchase less polluting models, would see the higher rate paid every year – an increase of £1670.

Speaking about the proposed change, Edmund King, AA president, said: ‘The public will expect a fair system of vehicle taxation and hence any changes shouldn’t apply to those that have already bought vehicles in good faith. For new vehicles the first year VED often gets lost in the purchase price of the vehicle but in subsequent years having a fair charge based on carbon emissions would make sense. We would welcome the idea of continuing with a zero rating for full electric vehicles and highly discounted rates for hybrids.”

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