You may remember a suggestion to write to our MP about the intended Road Tax increases.
Here is a reply from Angela Eagle MP Exchequer Secretary to the Treasury to my appeal over the increases to Road Tax.
"In explaining the approach the Government has taken in the Budget 2008 to reforming VED, I should begin by setting the context for the current proposals. In 1997 there was only one rate of VED, which was the same for all car owners, regardless of a cars cost or enviromental impact. In 2001, the government introduced a system of banding by Carbon Dioxide(CO2) emissions to provide a signal to motorists of the enviromental impacts of their potential choice. This change was welcomed by the main opposition parties at the time.
However by Budget 2008 it was clear that there was a case of going further. Firstly, the EU have proposed regulations that would require average new car CO2 emission to be cut to 130 grams of carbon dioxide per Kilometre by 2012. Secondly, the 'King Review of low carbon cars' was also published at Budget. This showed that drivers can save as much as 25% of carbon emissions by shifting to the lowest carbon car within a particular class. This does not mean shifting to a different type of car altogether eg from a family car to a small runabout, but it does mean picking a low-emitting family car.
Therefore, in Budget 2008 the government announced the direction of future reform of VED rates and bandings including:
* from 2009, the introduction of six new VED bands, to better incentivise a shift to 'best in class' cars and to reward drivers of low emission cars; and
* higher first year rates in 2010-11 to better influence purchasing choices at the point of sale.
It has been suggested that the application of the 2009 changes to existing cars is in some way retrospective taxation. Let me be clear that this is not the case. It is normal for car tax changes apply to all cars - as is the case for most other taxes, and VED changes have previously been applied to all existing cars, for example when a new band for lower emitting cars was introduced in 2002. In addition, applying VED rates only to new cars would cause confusion - effectively creating three systems of VED, and therefore undermine the overall enviromental signal.
Also it is worth pointing out as a result of these proposed changes, the majority of motorists in graduated VED(the post 2001 system) will be better off or no worse off in 2009 and 2010. Of those low-income families who own a car which will be subject to the new 13 bands of VED - these families are more likely to have purchased lower cost, lower emitting cars which are therefore in the lower VED bands. They are therefore more likely to be among the majority who will either benefit or be no worse off as a result of the reforms announced at the Budget, than those on higher incomes. Scrapping the application of the new VED rates to existing cars, is therefore likely to increase the tax that many of these households will pay in 2009.
If you are unsure of the CO2 emissions of your car you can:
* check the V5C registration document ;or
* enter details relating to the car into the DVLA vehicle enquiry website at
http://www.direct.gov.uk/taxdisc If your car was purchased prior to 2001 then it will not be subject to the CO2 based emissions scheme at all because reliable data on emissions for these vehicles is not available. Your car will not be affected by these reforms. Instead your VED will either be frozen, or increase by only £15 in 2009.
I would like to emphasise that no-ones VED will increase by £245 in one year, as has been inaccurately reported. No drivers will pay more than £90 extra in 2009 and most who face an increase will pay far less than that. Less than 5% of the cars that are subject to these reforms will pay an increase of more than £100 over two years - and those that do fall into a particular category, as they are currently paying VED at a lower rate than other cars that emit the same ammount.
I hope this explains the current situation.
Thank you for writing to me about his important subject.
Kind regards
Angela Eagle MP"
I would be interested on your comments to this letter......
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Topic: Vehicle Excise Duty-Car Tax increase - MP's reply (Read 1552 times)