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Budget could hold a shock for 4x4 drivers

Gordon Brown is expected to announce a tax clampdown on gas-guzzling cars in the Budget, in an effort to tackle climate change and boost revenues.

The Chancellor is examining proposals from the RAC Foundation for a new £200 top rate of vehicle excise duty, to cover cars that produce more than 250g of carbon dioxide per kilometre.

The Foundation has called on the Chancellor to combine the increase with tax cuts for more environmentally friendly cars.

However, insiders have suggested that the Chancellor may simply announce his interest in such a scheme this month, leaving implementation to a later date.

Victor Dauppe, tax principal at MacIntyre Hudson, said: ‘Any nasty shocks, such as an increase to national insurance contributions or the standard rate of VAT, are unlikely. Instead, the Budget could provide the Chancellor with the opportunity to pursue some of his current hobby horses: promoting green policies, attacking city bonuses and tax avoidance.’

Last month Malcolm Wicks, the Energy Minister, spoke of his keenness to counter the ‘crass irresponsibility’ of those who drive large 4x4s around the suburbs. (The Times: March 6).

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