Green Taxes to Hit Diesel Car Owners

British diesel car owners will suffer new taxes from 2018 as per new measures to weed out old vehicles. These taxes, dubbed 'green taxes', will affect approximately 800,000 cars owned by companies. Individuals who opt to purchase new diesel cars will also be affected. It is estimated that two million new buyers will have to shell out extra money due to this levy. The tax forms part of the UK government's plan to improve the quality of air. People will be discouraged to purchase polluting diesel cars. These cars are more harmful to the environment compared to the petrol ones.

New rules

If anyone purchases a new diesel car that does not satisfy the latest emission standards, then the buyer of the concerned car will be charged a one-time levy and also will be placed in a steeper vehicle tax duty group.

As per the latest rules, the rate of VED paid by the owner in the first year post purchase will be computed as if the vehicle will be in VED band above it. It means the car owner will part with a larger one-time amount. The latter could range anywhere from £10 to £500 more as they will pay as per the current slab rate. It is estimated by the UK Treasury that this tax increase will affect approximately two million drivers over a span of next five years. The government will enrich its coffers by around £125 million during the first year. The revenues will dip in later years as there will be fewer purchasers for more polluting vehicles.

Better emissions means less tax

Next-generation clean diesel vehicles will not be subjected to this hiked rate of tax. These vehicles must meet all emission limits as per new tests under 'Real Driving Emissions Step 2'. The latter will be applicable from 2020. It means all cars which use diesel as fuel will be subjected to extra tax from April 2018. In real-world terms, any employee driving a £30,000 car where diesel is used as fuel will see the yearly supplement tax for diesel go up by about £300 every year- from about £900 to about £1,200.

According to the Society of Motor Manufacturers, the organization that represents car industry, car manufacturers cannot manufacture cars that quench new standards within April 2018. A spokesperson said that it is impossible to accelerate the introduction of clean diesel technology vehicles as these take years to develop, and not months.

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