Road tax heads environment measures

The chancellor unleashed a barrage of environmental changes in his first Budget, among them a £1.2bn drive on road tax, the biggest single revenue raising measure announced.

The move was criticised as a ‘revenue raising exercise’ by Frank Sangster, an environmental tax partner at KPMG. He added that the proposal was ‘not going to decrease emissions’ .

The reforms will include six new vehicle tax bands and be based on CO2 emissions per kilometer. New vehicles will have a separate tax scheme in their first year.

As part of a commentary on government efforts to cut carbon emissions Alistair Darling announced a new Carbon Budget would be set with each main Budget for the next five years from next year.

Experts have speculated that the Treasury’s focus on carbon could drive growth in new environmental advisory services for the firms.

Nick McChesney, partner in environmental tax at PricewaterhouseCoopers, said firms would need to ‘clarify’ how to offer advice on environmental taxation to their clients.

See our Budget 08 Special Report