Car tax increase plan 'a timebomb'

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The Government’s plans to increase car tax have been dubbed a "ticking timebomb" which has provoked as much anger in the country as the abolition of the 10p tax rate, the Tories have claimed.

According to the shadow chief secretary to the Treasury, in the region of 3.7 million drivers’ll lose £90 per year when the changes come into force and overall, while one million families would see their tax double.

Philip Hammond said the motorist was "under assault in many directions" and many people on low incomes, larger families and retired people would be hit as they were more likely to own older cars.

Announcing the car tax changes in March Chancellor Alistair Darling set out "a major reform to Vehicle Excise Duty" designed to "encourage manufacturers to produce cleaner cars".

Under the new system, which comes into effect next year, there will be 13 bands ranging from A to M. Vehicles will be classed based on carbon emissions with owners of cars in the top band - band M - paying £440 in tax. The most polluting new cars will pay a showroom tax of up to £950 starting in April 2010.

But the Treasury is also abolishing exemptions from the highest rate of tax for older cars. This means that owners of larger cars bought since March 2001 will find that their road tax will rise steeply from next April, the Tories claim.

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