Darling Revises Plans To Increase Vehicle Excise Duty

by Robin Pilgrim, LawAndTax-News.com, London

29 September 2008

UK Chancellor Alistair Darling has been forced to go back on next year's plans to increase Vehicle Excise Duty (VED) in a drastic attempt to prevent backlash against the Labour party.

Under the plans, Darling was set to re-classify the rates of VED required from motorists in order that so-called "gas-guzzling" cars paid more tax to compensate for the damage their vehicles contributed to the environment, backdating payments from as long as seven years ago.

However, millions of UK motorists have protested so strongly against the move, that the Chancellor has been forced to withdraw the plans to prevent a large-scale protest against the Labour party during a time of economic uncertainty.

Objection to the new legislation didn't stop with the public, however, as several Labour backbenchers voiced strong opposition to the Chancellor's intentions, signing a Commons motion in protest.

The plans were first announced in November of last year, when proposals were put forward by a government-commissioned review to introduce the equivalent of a GBP1,000 penalty on high emission cars, in an attempt to reduce the damage from these vehicles to the environment.

It was hoped that this would be one of the first steps in increasing the cost of buying and running cars which produce high levels of carbon emissions, through the introduction of higher levels of excise tax, and the imposition of a purchase tax on such vehicles, with motorists opting for 'greener' methods of transportation as a consequence.

Although the Chancellor will now alter the plans, it is thought that instead of scrapping the VED altogether, he will merely delay its introduction by implementing it in several stages, with the highest tax increases coming into effect in 2010.

Mr Darling is expected to make a further announcement on the matter in his pre-Budget report later this autumn.

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