What's changing?

What's changing?

Anyone who owns a car registered between March 2001 and March 2006 that emits more than 186g/km of carbon dioxide will be affected by the proposals.

These vehicles used to be exempt from the highest rate of VED road tax, but this exemption was dropped at the last Budget, and it's this that has sparked the current debate.

The Government justifies the change by saying it is part of its initiative to encourage people to choose greener, lower-CO2-emitting cars.

Critics, though, point out that the ruling will affect larger-engined models of mid-price family cars such as the Renault Espace and Ford Mondeo.

These cars are a long way from the opulent 4x4s that most people have in mind when they talk about high-emitting vehicles. Typically bought by families needing the space, they also need a large engine to provide adequate pull.

The impact on owners of these cars is twofold: they face both the higher VED road tax bands, and the value of their cars will plummet, because they will become less desirable to prospective buyers due to their higher running costs.

Analysts say the fall in values could make many cars worthless. Critics add that, because the drop in value will result in a loss of money that couldn't have been foreseen when the cars were bought, the tax is retrospective - something that is traditionally eschewed by governments as being unjust.