The UK has become a 'tax haven' for polluting SUVs, according to a new analysis by green thinktank Transport & Environment (T&E). The report finds that first-year vehicle excise duty (VED) on petrol and diesel SUVs in Britain is a fraction of that in countries like France and the Netherlands, encouraging a glut of large, luxury cars.
For a medium-large SUV such as the BMW X5, first-year VED costs £1,565 in the UK, compared with €60,000 (£51,400) in France, which also imposes a surcharge on heavier cars. The low tax does little to incentivise greener choices, with the price difference between a petrol SUV and a battery electric equivalent smaller in the UK than in most of Europe.
Car sales data from last year show higher-polluting vehicles have a vastly bigger market share in the UK than across the Channel. Vehicles emitting 160-199g CO2/km accounted for 9.3% of private registrations, and those above 200g CO2/km for 6.1%. In France, the same bands made up just 0.7% of sales.
T&E urges the UK to revise its tax system before next week's budget, including increasing initial VED on the most polluting cars and introducing a weight-based element. Ralph Palmer, T&E's UK electric vehicle officer, said: 'The UK government is missing out on an equitable and easily actionable source of revenue by not targeting wealthy buyers of oversized, over-polluting SUVs.'
A government spokesperson said: 'We want all new cars and vans to be zero emissions by 2035. We have already invested over £2bn to support this transition.' They noted that new EV registrations have increased by 1,730% since 2017, and sales of used pure electric cars have reached a record high.
