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Sales levy planned for high emission cars

Cars that have high emissions of CO2 will be slapped with a large sales tax, according to reports. The measures in this Wednesday's Budget could increase their prices by £2,000.

The Sunday Times quoted a Treasury source as saying that car buyers will "take more notice" of a charge that directly affects the new car price, rather than the existing incentives based on road tax.

It also suggested that the chancellor might adjust the current sliding scale of road tax to make low emissions cars more attractive. At present, cars that produce fewer than 100g/km CO2 do not pay for road tax.

The Observer said the chancellor is likely to accept proposals from a Treasury-commissioned report, which urged the government to make the most polluting cars more expensive by raising their initial purchase price or running costs.

The Society of Motor Manufacturers and Traders said the reports were pure speculation and declined to comment further.

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