Staveley Head

Staveley Head

April 01, 2010 09:25 ET

Extra Road Tax on All New Cars Sold After 1st April 2010

FLINT, UNITED KINGDOM--(Marketwire - April 1, 2010) - Staveley Head, one of the UK's leading motor trade insurance providers have given their thoughts on the new extra road tax for new cars.

You might be forgiven for thinking this is an April Fool's Day joke, but it isn't. From the 1st April all new cars sold will be subject to a one-off extra Vehicle Excise Duty (VED)levy, the amount being dependent upon the vehicle's level of CO2 emission. Also known as a Showroom Tax, the levy is designed to encourage buyers to purchase vehicles with lower CO2 emissions.

The once-only road tax will apply to all new cars during their first year of registration, and the cost will be on a sliding scale based on CO2 emissions. Cars emitting less than 130g CO2/km will not pay any VED at all for the first year, with rates of Pounds Sterling 110 for cars emitting 131-140g CO2/km and continuing up to Pounds Sterling 950 for cars emitting in excess of 255g CO2/km. The introductory rate of VED will be paid by the customer at the time of purchasing the vehicle and revert to the whatever current standard rate at the end of the first year.

Cars in the lowest band, which makes up 7.2% of the market, will see a reduction in VED of up to Pounds Sterling 120 on current rates in the first year, whereas at the top end of the market the introductory rate will equate to a Pounds Sterling 545 increase for the first year and a Pounds Sterling 30 increase for every subsequent year. Although only 1.5% of new car sales fall within this category.

Paul Everitt, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT) said "We are disappointed that Government didn't take the opportunity in last week's budget to defer the introduction of the first year rate or the increase in standard VED rates. Environmental taxes need to be clear and consistent so that motorists can be confident that they will reap the benefits from their decision."

A spokesman for Staveley Head, said "The motor manufacturing industry is in a very fragile state at the moment and we would therefore expect the Government to encourage people to buy a whole range of cars across the board. Not just on questionable environmental principles. Manufacturing and industry need a huge impetus in the next year if we are to have any hope of an early economic recovery. Surely a green issue like this, providing such a small benefit to the environment could be deferred for a year before we recommence saving the planet."

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