UK could raise nearly 2bn by taxing SUVs in line with European countries, study shows

"Taxing Britain's SUVs in line with other European countries could raise almost 2bn a year for the public finances, research has shown. The Transport & Environment thinktank has urged the government to use the autumn budget to bring in a levy on the largest vehicles, which it said would reflect the damage they caused to the environment and infrastructure."

"T&E said the current UK vehicle tax system was not keeping up with the change in the profile of cars sold, with heavier and more polluting cars escaping adequate taxation and coming to dominate the market. An SUV loophole meant UK buyers paid up to 20 times less tax on the biggest models than counterparts in other European countries, it said."

"Vehicle tax on a new 85,000 BMW X5 would amount to 3,200 in the UK, but the sale would incur taxes of 66,600 in France driving UK SUV sales to four times the level in France. In 13 countries, acquisition taxes for such an SUV are more than three times higher than the UK's, although seven impose no tax. Some changes to UK vehicle excise duty rates were made in April to make more polluting cars pay more."

Taxing Britain's SUVs in line with other European countries could raise almost 2bn a year. The current UK vehicle tax system fails to reflect heavier, more polluting cars escaping adequate taxation. An SUV loophole lets UK buyers pay up to 20 times less tax on the biggest models than in some European countries; vehicle tax on a new 85,000 BMW X5 would be 3,200 in the UK versus 66,600 in France. T&E proposes an additional levy of 10 a kilogram for vehicles above 1,600kg, with a 400kg allowance for battery electric cars. With SUVs at almost 60% of new registrations the levy would yield about 1.72bn and add more than 10,000 to some models.

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