Gas-guzzling car tax under discussion

Proposals put forward by a government advisor could leave car buyers with a tax bill of up to £23,000.

The scheme would see the introduction of a new purchase tax levied on vehicles with large engines. The plans would see the cost of new cars increase, with even the price tag of some small cars jumping up by more than £1,500.

But in contrast motorists who buy a small energy-efficient car could receive as much as £750 towards the cost of the vehicle.

The idea is being put forward by the Liberal Democrats as an alternative to road tax. The proposal has been drawn up by Government adviser Tim Leunig, who believes the new tax would encourage vehicle manufacturers to invest in creating more eco-friendly cars.

The measure would also encourage drivers to pick a greener option when shopping for a new car.

Mr Leunig claims picking a more fuel efficient car could potentially save around £2,700 in petrol or diesel costs over 100,000 miles.

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