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Car industry warns Government against tax hikes

SMMT says any road tax increase for motorists would damage buoyant UK car market

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The car industry has warned the Government not to be tempted to hike taxes for motorists after the next election.

Britain goes to the polls in May, and there are fears that whoever forms the new Government may again target drivers to raise revenue.

But the Society of Motor Traders and Manufacturers (SMMT) believes this would be a backward step, particularly in light of another strong year for registrations in 2014.

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Chief executive Mike Hawes said: “Whoever wins, we know there will be a period of austerity to follow. We are uncertain about the nature of the austerity.

“There is likely to be cutbacks in spending and increases in taxation. “We want to be able to say to whoever wins the election that the market is strong, it is delivering revenue to the Exchequer. You do not want to upset the market.”

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One particular area of concern is that Vehicle Excise Duty could be hiked on expensive vehicles – including UK-built models such as Range Rovers – with more affluent consumers being targeted for higher taxes as the drive to reduce the deficit continues.

Hawes pointed out: “It’s surprising how sensitive consumers are to VED. What we are trying to say to the Government is that in the last few years policies have been very sympathetic to UK manufacturing.

“We want to make sure we have a strong domestic market, and the recovery isn’t undermined by a specific policy in taxation. “The sector isn’t broke, so don’t fix it.” Hawes also reiterated the SMMT’s desire for Britain to remain in the European Union.

Now find out about the best new cars to buy in 2015...

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