New diesel cars to face tax hike next year

Chancellor Philip Hammond will raise taxes on newly registered diesel cars in the upcoming Autumn Budget, in a bid to push drivers towards petrol and electrified vehicles, according to government insiders.

Unnamed aides claim Hammond believes a tax increase on new diesel-engine vehicles from 2018 is “the best option” to meet requirements set out in the Clean Air Strategy in July, reports the Financial Times. 

The plans will be announced when he presents his Budget, on 22 November, the newspaper adds, although it is not yet known whether the Government “will increase VAT on diesel sales or choose to create a new levy”.

If the tariffs are confirmed, says Auto Express, they “signal a further blow” to the future of diesel-engine cars. Diesel vehicle sales fell by 29.9% in October compared with the same period last year. 

Yet recent research indicates that modern combustion-engined vehicles emit significantly fewer toxic emissions than their decade-old counterparts.  

In April, Autocar argued that modern diesel-powered cars were “clean” and that “the industry needs the sales to fund the electrification that is coming”.

This week AA chief Edmund King criticised the reported tax hike. Speaking to the FT, he said: “It is ridiculous to further demonise diesel via differential taxes when drivers are already voting with their wheels.” 

“Some 41% of AA members own diesels but that drops [...] to 16% when drivers are asked what fuel their next car will run on”, he added. “The Treasury should concentrate on incentives for greener cars rather than hitting diesel.”