Finance Bill — Clause 42 — Vehicle Tax — Relation to Carbon Dioxide Emissions — Surcharge for Vehicles Costing Over Forty Thousand Pounds — 26 Oct 2015 at 17:30

The majority of MPs voted against charging the first year rate of vehicle tax, which varies substantially based on carbon dioxide emissions, for the subsequent two years as well; against a variable rate of vehicle tax based on carbon dixoide emissions for vehicles registered on or after 1 April 2017 and to charge additional tax on vehicles costing over £40,000.

The tax under consideration is known by the Government as Vehicle Excise Duty (VED), or Vehicle Taxation. It is commonly also known as "car tax" and misleadingly, given not all road users pay it: "road tax".

MPs were considering the Finance Bill^[1]

The amendment rejected in this vote^[2] began:

• Amendment: 93, page 58, clause 42, leave out from beginning of line 1 to end of line 37 on page 60 and insert—
• “Graduated rates of duty payable on first vehicle licence
• ...

The element of the Bill to be replaced sought to amend the Vehicle Excise and Registration Act 1994. The rejected amendment would have altered clause 42 of the Bill^[3] and sought to:

• charge the level of duty payable in the first year of registration in the second and third year as well. This is the rate paid on purchase, sometimes called the "showroom tax" which includes a tax of £2,000 on the vehicles which emit the most carbon dioxide.
• set a variable rate of duty based on carbon dioxide emissions for vehicles registered on or after 1 April 2017 including a £20 rate for vehicles emitting no carbon dioxide rising to £260 for those emitting the most carbon dioxide. (Proposals in the Bill were for a £0 rate for vehicles emitting no carbon dioxide and a rate of £130 or £140 for others).
• remove the higher rates of duty charged on vehicles with a price exceeding £40,000.

During the debate the MP who proposed the rejected amendment, Rebecca Long-Bailey, said^[4]:

• Logically, frontloading VED for the first three years, as we would, will therefore have a greater influence on consumer behaviour and encourage the purchase of greener vehicles. We have also scrapped the punitive regime for cars over £40,000.

==

• [1] Parliament's webpage on the Finance Bill
• [2] Page of amendment paper containing rejected amendment
• [3] Clause 42 of the Finance Bill, to which the amendment relates
• [2] Rebecca Long-Bailey MP (Salford and Eccles), House of Commons, 26 October 2015

Debate in Parliament | Source |