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UK a 'tax haven' for sales of polluting SUVs, says green think tank

SUV sales are rising in the UK despite concerns of pollution (AFP via Getty Images)
SUV sales are rising in the UK despite concerns of pollution (AFP via Getty Images)

Britain is becoming a tax haven for drivers of highly polluting cars, according to analysis released by a green think tank.

Transport & Environment shared a report on Friday that said that UK laws are “failing to address the cost of the emissions” under its current laws.

This is because its study found that the cost of tax paid on a new petrol or diesel sports utility vehicle (SUVs) is significantly less than many other countries in Europe.

Ralph Palmer, UK Electric Vehicle and Fleets Officer at Transport & Environment, 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.

“The result is that the UK risks becoming a tax haven for larger and more polluting cars, despite the harm they cause to the environment and other road users. Bringing the UK’s taxes on larger, luxury, more polluting cars more in line with other European countries will help make green alternatives more appealing to new car buyers.”

SUVs are a large and often expensive car type that can still be used on high streets, such as a Nissan Juke or a Range Rover. They can also be known colloquially as 4x4s or jeeps even though they are not necessarily four wheel drive or of the brand Jeep.

Buying an BMW X5 in the UK will require you to pay £1,565 vehicle excise duty which is perhaps not as much of a disincentive when the car costs £67,000 to purchase new.

The equivalent first year vehicle excise duty for the same car in France would be £51,400.

Meanwhile, the same tax would be €1,119 (£959) for a Land Rover Discovery Sport in the UK but €26,282 (£22,301) in the Netherlands and €30,624 (£25,700) in France.

According to Transport & Environment research, around 15 per cent of all cars sold in the UK have emissions of higher end levels of 160g CO2/km or more. This compares to just 0.7 per cent of sales in France.

A recent vote in Paris has paved the way for owners to pay an additional amount to park them as a deterrent from ownership but London is unlikely to follow suit any time soon.

Last year, SUV sales grew by 23 per cent in the UK.

Figures showed that buyers of the average petrol compact SUV in the UK only paid £255 in acquisition tax which puts the UK 16th out of 23 within Europe.

A Government spokesperson said: “We want all new cars and vans to be zero emissions by 2035, we have already invested more than £2 billion to support this transition.

“Since 2017, the number of new EV registrations per year has increased by 1,730 per cent, and sales of used pure electric cars have reached a record high.”