I have no plans to change the basis of charging motor tax from engine capacity to carbon emissions (CO2) for cars registered prior to 2008. The question of applying the CO2 based system to all cars was the subject of detailed discussion at the time of introduction of the new basis of taxation in 2008. Any retrospective application would not have been possible as the CO2 data available for the existing fleet had not been authenticated for this purpose.
For cars registered since 2008, tax is based on the CO2 emissions level as provided on the Certificate of Conformity for the vehicle. The level of CO2 is determined at manufacturing stage as part of the type approval process for the vehicle. It is the level emitted in terms of grams per kilometre driven and is also affected by factors such as engine size, body type and weight, aerodynamics, type of transmission, etc. I understand that determining the level of CO2 emitted by a vehicle is expensive and that it is generally only carried out in respect of new vehicles at manufacturing stage.
Further, it is my understanding that a test for CO2 does not form part of the NCT test.
In recognition of the lower average motor tax paid in respect of vehicles taxed on the basis of CO2 emissions compared to pre-2008 vehicles, differential increases have been applied in recent Budgets with a view to re-balancing the tax base while retaining the environmental incentive to purchase more environmentally friendly vehicles. The percentage increase in motor tax for passenger vehicles taxed on engine capacity was 7.5% in Budgets 2012 and 2013, compared with increases averaging 25.5% in Budget 2012 and 19.8% in Budget 2013 for vehicles taxed on CO2.
