Why is this clean hybrid car taxed at almost the same rate as a Ferrari? | Money

A The retired bishop who replaced a polluting diesel car with a much greener plug-in hybrid model called the government’s environmental policies “completely crazy” after his road tax fell from zero to £ 480 a year.

Reverend Robert Paterson, who lives near Evesham in Worcestershire, was hit by the bill after switching to a used BMW 330e plug-in hybrid electric vehicle (PHEV), which claims a maximum fuel economy of 200 miles per gallon and emits only 32 g. of CO₂ per km, according to its official classification. It cost around £ 33,000.

The aging 2014 diesel-powered VW Golf that BMW replaced – a car soon to be considered too polluting to be driven in London without incurring an extra £ 12.50 per day charge – did not attract any road tax.

Paterson’s new car fell under a tax regime change in 2017 which resulted in a higher charge on vehicles costing over £ 40,000 when new. It affects many plug-in hybrids because they are more expensive to manufacture. This means that homeowners face a tax surcharge of £ 335 per year for five years from the second year of ownership regardless of whether they are ultra low CO₂ emitting or gas-guzzling sports cars.

“I have chosen to drive relatively ‘green’ cars for 20 years. Even though my Golf was considered green when I bought it, it’s less so now, ”says Paterson.

“The BMW was a revelation, especially in the way it adapts to city use, often producing no emissions at all. Since my last refueling six weeks ago, it has driven 300 miles in electric only mode and consumes very little gasoline.

His £ 480 a year is just £ 10 less than what he would pay if he had bought a Ferrari of the same age. Only 100% electric cars are still tax free.

The AA has called for reforms to a regime its president, Edmund King, calls “perverse.”

A government consultation on excise duties on vehicles, launched in March last year, noted that the 2017 rules particularly affected used car sales, “where the incentive for buyers to choose cars low emissions is reduced, “and called for advice on whether the system should be changed.

“We have repeatedly urged the Treasury to reconsider this position and, although there was the recent consultation, they still have not released the findings,” King said.

“Rather than offering incentives and encouraging motorists to equip themselves with cleaner and less polluting cars, the current tax system imposes higher bills on those who choose greener cars. It’s a bit of a mess. “

What particularly frustrates Paterson is that if he had bought a conventional petrol or diesel BMW, with a lower initial list price, he would pay £ 155 a year to tax the car after the first year – although it produces a lot. more carbon and less miles per gallon.

“This is all crazy and needs to change urgently,” Paterson says. “Until batteries become more efficient, PHEVs are a way forward for many, so why are their owners penalized in this way, when more polluting cars are unscathed? What am I forgetting here? “

The Treasury said: “Hybrid vehicles are an important technology for reducing emissions and our reformed vehicle excise duty system seeks to reflect this while providing the greatest incentives for zero emission vehicles and ensuring sustainability. longer-term public finances.

“Under the current system, all vehicles over £ 40,000, other than zero emission cars, have to pay an extra costly car surcharge – those who can afford the more expensive cars carry a greater burden. “

Boris Johnson’s climate spokesperson Allegra Stratton last month caused some dismay when she revealed that she “didn’t feel like” switching to an electric car because her diesel-powered VW Golf third hand “suited him much better”.