Nine million face car tax increase

The Government has admitted that in excess of nine million motorists will be worse off under controversial road tax reforms.

Official estimates predict that 43% will see their bills rise by up to £245 by April 2010, with fewer than a fifth being better off in real terms.

Ministers insist the new measures are being brought in to punish high-polluting cars rather than raise revenue.

The figures emerged as Treasury minister Angela Eagle hinted that drivers may be offered cash to scrap their ageing gas-guzzlers rather than sell them on.

The move could form part of a package to ease the pressure on low-earners from the VED reforms, amid cross-party complaints that cars up to seven years old will be hit with huge duty rises next year.

The road tax changes were passed by the Commons earlier this month - but only after Chancellor Alistair Darling promised Labour rebels that there would be moves this autumn to smooth the transition.

They predict that tax will be increased on 8.7 million vehicles in 2009-10 - all in the six most-polluting bands.

Overall in 2009-10, "a third of cars will be better off in real terms, and in total, approximately 55% of cars will be no worse off" according to the minister. Just over 44% will pay more. Some 8.4m will lay out around the same, while 1.4m are set to benefit financially.

Experts calculate that the Exchequer will have received more than a billion in extra revenue by 2011.

Vehicles such as Range Rovers and some people carriers emitting more than 255g of CO2 per kilometre will pay up to £440. Cars with smaller engines face a £100 rise.

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