Vehicle duty increase for cars registered before March 2006

Many thousands of older models of car are to become liable to new road taxes.

Changes introduced in the Budget mean that some cars registered before March 2006 will now be subject to increases in vehicle excise duty.

When the top rate of tax was implemented for cars that emit more than 225g of carbon dioxide per kilometre, an exemption was made for those registered between March 2001 and March 2006.

However, a new set of 13 duty bands has been introduced, depending on a vehicle’s CO2 emissions, and as part of the new system the exemption on older cars has been removed.

As a result, heavy emission cars registered between March 2001 and March 2006 could be liable to the new top bands.

The change is to take effect as from April of next year.

Owners of cars that emit more than 225g of carbon dioxide per kilometre could see their duty charge more than double by 2010, while the charge on cars emitting more than 180g of carbon dioxide per kilometre could rise by as much as £100 in the same period.

The Treasury has conceded that the change was not well signposted in the Budget.

A spokesperson for the Treasury said: “It’s not as clear in the Budget as it could be. It’s not explicitly spelt out.”

Cars registered before March 2001 will still be exempt from the higher rates.

Date:1 May 2008