VED changes 'seen as a stealth tax'

Date: 25th July 2008

Road users, including many small business owners and sole traders, are concerned that the proposed retrospective vehicle excise duty (VED) changes are being used as a stealth tax.

The Chancellor recently signalled that he wants to implement an increased VED level for polluting cars purchased between 2001 and 2006.

However, a new AA survey showed that 59 per cent of drivers thought that it was unfair for the tax to be retrospective.

While 70 per cent of people thought a VED system based on CO2 emissions would influence future car purchases, 35 per cent revealed they did not understand the new system of VED.

Similarly, 77 per cent of car owners said they thought backdating road tax changes might damage the value of some used cars, forcing people to hold on to them for longer.

"Over 80 per cent of motorists now see road tax as a stealth tax and we have called it a mean tax rather than a green tax," commented AA president Edmund King.

"If the retrospective increases in tax go ahead in 2009 or 2010, then there is the possibility that many motorists might be driving to the polls still fuming from excessive tax increases to the cars they bought before these tax changes were proposed."

Recently, accountants claimed that the government was considering altering vehicle corporation tax to encourage more environmental practices from businesses in the UK.