Gas-guzzling vehicles could face a new tax of up to £23,000 under new proposals drawn up by a government advisor.
The new plans, supported by the Lib Dems, could even see the most efficient cars subsidised to the tune of £750 and see the end of annual Vehicle Exercise Duty payments.
According to The Telegraph, even some smaller cars could see their price tag rise by around £1,500 as the government looks at new ways to encourage the use of fuel efficient models without losing tax revenue.
The plan, written by government’s special advisor, Tim Leunig on behalf of the CentreForum think tank has already received backing from the Energy Secretary Ed Davey.
Instead of an annual tax, the system proposes a one-off tax is added to the purchase price. The exact charge would depend on the car’s emission levels with taxes use to subsidise the purchase of the most efficient model.
Replacing vehicle excise duty with a one off charge on new cars would cut 2.6 per cent off total UK carbon emissions after 15 years, the CenteForum’s new report says.
CentreForum calculates that the new tax could cut fuel use by around 450 gallons over a 100,000 mile lifetime, saving motorists around £2,700.
Ed Davey, Secretary of State for Energy and Climate Change, said: "I welcome this report. It is exactly the sort of innovative thinking we have come to expect from CentreForum."
Kate Barker, former chief economist at Ford Europe, said: "This is a great proposal with strong rationale."
Faye has been writing about cars and environmental issues since 2007. A suspected eco-warrior working on the corporate inside, Faye mainly likes the weird, quirky vehicles that show a distinct environmental advantage. Her ideal car has enough room to fit a bale of hay in the boot. When not working, she likes nothing better than to head out on her bicycle and explore the countryside.
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