Budget 2007 - Farming and Estate Summary

Cars

Vehicle Excise Duties have increased for most cars in excess of inflation with an alignment of rates for petrol and diesel cars. There is a reduction for the least polluting cars (CO₂ emissions of 101 to 120 g/km) and a significant increase for the most polluting cars (226 g/km and above) with a £300 charge increasing to £400 next year.

Further consultation regarding capital allowances on company cars indicates the government's preference to encourage the use of cars with low CO₂ emissions replacing the existing restrictions for expensive cars.

VAT car fuel scale charges have been aligned with direct tax principles with charges based on CO₂ emissions. Overall the charges are broadly neutral when compared to the existing charges but now favour low polluting cars and penalise high polluting cars.