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Budget 2008: Green tax fails to satisfy critics
The chancellor’s green-themed budget has failed to mollify government critics who have been left confused by a number of contradictory initiatives.Green tax at a glance
- The first carbon budget will be announced with next year’s budget.
- Government will raise CO2 emission targets from 60% to 80% by 2050.
- Legislation imposes charge on plastic bags will be introduced in 2009, with money raised going to environmental charities.
- £26m funding will be allocated for green housing services to advise people on environmentally friendly homes.
- Non-domestic buildings to become zero carbon by 2019.
- The government supports expansion at Stansted and Heathrow airport but aviation must meet environmental responsibilities.
- Vehicle excise duty will be reformed in 2009, with the introduction of new taxation bands to encourage drivers to choose cleaner cars.
- No car tax in first year for cars that emit less than 130g of carbon per km.
- First year capital allowances for company cars that produce less than 110g/km of C02 emissions and for environmentally beneficial plant and machinery.
Alistair Darling touted several carbon-emission busting schemes, including new vehicle excise duty bands, charges for plastic bags and a zero carbon scheme for new commercial buildings, referring to the green issue as "our greatest obligation to future generations."
He also pledged to save 75 million tonnes of carbon dioxide over the next 30 years through the zero carbon homes scheme, flight taxes and energy initiatives such as the 'smart metre', which aims to incentivise businesses to cut energy output.
However, critics have questioned what they see as somewhat contradictory green measures. Plans to increase vehicle excise duty to £425 for the highest-polluting cars was one of the plans welcomed by environmentalists. However, they were equally angered that the 2p per litre hike in fuel duty has been delayed until October.
"Darling's safe pair of hands have dropped the ball on climate change," said Greenpeace executive director, John Sauven. "Suspending the promised increase in fuel duty has fatally undermined his boast that this is a green budget. Tinkering with taxes on planes and cars isn't going to stop new runways and roads being built."
Others green schemes announced by the chancellor include making non-domestic buildings zero carbon by 2019 and offering energy exemptions for commercial plant and machinery, including vehicles. However, some experts have questioned whether the moves to cut emissions have gone far enough. "If the government is to achieve its much vaunted 60% reduction by 2050 (which could rise to 80%), it has to address more than just business vehicles," said Steve Mason, financial director of Siemens Financial Services.
"Cost is the biggest obstacle to UK business investment in low carbon emission equipment."
From April 1, the overhauled capital allowance system will offer 100% first year tax credits for designated energy-saving and environmentally beneficial plant and machinery. First year capital allowances of 100% will be available for purchases of new company cars that produce less than 110g/km of C02 emissions, as will equipment to refuel vehicles with natural gas, biogas and hydrogen fuel, as well as energy-efficient and water-saving technologies.
Budget 2008 coverage sponsored by
AccountingWEB.co.uk 12-Mar-2008
Categories: Budget News, Tax News
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