UK to impose extra VED tax on diesel cars next year

Diesel cars, fast gaining pariah status in the West because of the NOx they emit, have received another big blow by one of its most important markets. The UK will hike Vehicle Excise Duty (VED) for those registering a new diesel car from April next year, which do not meet more stringent pollution requirements, Reuters reports.

“The tax system can play an important role in protecting our environment. We owe it to our children that the air they breathe is clean,” chancellor of the exchequer (finance minister) Philip Hammond told parliament in his annual budget statement.

The VED hike will force buyers to pay up to £500 extra in the first year of ownership, the Daily Mail points out. However, most regular motorists will not be paying so much. The change will add 20 pounds to the cost of VED for smaller cars, such as the Peugeot 208 (76-90 g/km CO2 tax band) to the BMW 3 Series (111-130 g/km). The big diesel engines of giants like the Land Rover Discovery and Porsche Cayenne will attract considerably more tax, £400 and £500 respectively.

All new diesel cars will be affected unless they meet so-called EU real world emissions standards, although that’s a couple of years away. However, the 12 million existing diesel cars will not be affected by the changes, which are for new cars. That’s if it’s a privately owned car – the 750,000 employees in the UK who drive diesel-powered company cars will have their tax surcharge raised from 3% to 4%.

Commercial vehicles will however be exempted, presumably to not add extra burden to businesses. “No white van man or woman will be hit by these measures,” Hammond said. The government says that money raised from increasing taxes on diesel drivers will support a £220 million clean air fund to tackle pollution.

The move against diesel, once championed by Europe, started with Volkswagen’s Dieselgate emissions cheating scandal in 2015. Since then, big European cities including Paris and Madrid have announced plans to curb diesel emissions via fines and restrictions. That’s part of a wider phasing out of the internal combustion engine, however.

UK to impose extra VED tax on diesel cars next year

Not all are nodding in agreement. “It’s unrealistic to think that we can fast-track the introduction of the next generation of clean diesel technology which takes years to develop, in just four months. This budget will also do nothing to remove the oldest, most polluting vehicles from our roads in the coming years,” said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders.

Sales of diesels have fallen 15% so far this year in the UK, Europe’s second-biggest car market, whilst demand for petrol has increased 3%, as buyers fear regulatory impact on their wallets. The continent as a whole reported that sales of petrol-powered vehicles have overtaken that of diesel for the first time since 2009.

The scales will surely tip more towards the petrol, hybrid and electric camp after this latest development, which might have fast-tracked the death of diesel.