Gas-guzzlers faced with £2000 surcharge

18 September 2007

Chancellor considers purchase tax
High polluters will pay £2000 more for car
Low polluters will get £2000 rebate

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The Chancellor of the Exchequer is preparing to announce a one-off £2000 purchase tax on Britain's most polluting cars.

A story in The Times newspaper suggests that the charge will be revealed in this autumn's Pre-Budget Report.

An internal HM Treasury memo suggests the new tax would apply to all vehicles emitting more than 254g/km of carbon dioxide.

If the proposals by Chancellor Alistair Darling reach fruition, the purchase tax would be paid by the buyer of the new car.

The car would also be eligible for the highest annual VED road tax band, which is currently £300 for petrol cars.

However, buyers of cars emitting less than 100g/km of carbon dioxide would be able to claim a £2000 rebate off the purchase price.

All other motorists would be unaffected.

The purchase tax, which remains a proposal rather than legislation, would be introduced in place of higher VED road tax bands for high-polluting vehicles.