£23,000 gas-guzzler tax proposal

Motorists opting for gas-guzzling sports cars could face having to fork out up to £23,000 extra if plans for a new purchase tax are adopted.

As well as landing buyers of large-engine vehicles with a huge tax payment the plans -- drawn up by recently-appointed government special adviser Tim Leunig and promoted by the Liberal Democrats -- could see the price of smaller cars rise by over £1,500 with annual Vehicle Excise Duty payments scrapped.

But drivers choosing to purchase smaller and more efficient new cars would get a government subsidy of up to £750.

Mr Leunig says the proposal would encourage manufacturers to develop efficient cars and provide an incentive for motorists to buy them. And he estimated a more efficient car could save motorists £2,700 by cutting fuel use over a 100,000-mile lifetime by about 450 gallons. Costs can also be trimmed by using ajourney planner to ensure unnecessary mileage isn't clocked up.

His proposals come as the Treasury looks at the best way to replace or reform Vehicle Excise Duty in the wake of modern cars' rising fuel efficiency.

RAC technical director David Bizley says: "Any new form of duty that is charged on the price of new cars is hugely unfair on larger families who require bigger cars to get around. It also penalises people that do not drive many miles a year but may need to run a larger, four-wheel drive vehicle because of where they live or the job they do.

"This type of scheme is only fair if everybody drives the same amount of miles a year. For this reason RAC is in favour of a scheme based on the number of miles a car is driven a year.

"RAC strongly supports the reduction of carbon emissions but is urging the Government to conduct a wholesale review of motoring taxation to ensure every element from vehicle excise duty to the duty and VAT charged on fuel is considered to give the motorist a fair and transparent deal."

Copyright Press Association 2012