Possible rough times ahead for premium cars in the UK

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The UK government is planning a new tax for premium vehicles starting with 2017 and needless to say the premium manufacturers are not so crazy about the idea.

Right now, all vehicle owners in the UK have to pay an annual tax in quantum of 140 Sterling Pounds. Everybody hates taxes, but at the same time, we all understand they’re a necessary evil, since no one would willingly donate their money over to the government.

Starting with 2017, the plan is to charge an extra 310 pounds over the existing tax for those citizens who buy cars with a list price above 40,000 pounds (roughly 55,000 euros). If that’s not “taxing the rich”, then I don’t know what is. Did the UK switch over to a socialist government while I was making my tea this morning?

You can back-up a plan to tax cars based on pollution levels, on engine displacement, mass, efficiency and what not, but you can’t seriously demand more money from people who buy expensive cars, unless the tax is calculated based on percentage, in which case it would go without saying.

Funny thing is that, while this measure would affect all cars above that price mark (so most of the Mercedes-Benz range, too), it would also hit almost all of the British brands and small manufacturers. Thinking about the British car industry, there’s nothing BUT premium brands left, starting with Jaguar Land Rover, going through Bentley and Rolls-Royce and finishing up with the likes of McLaren, Aston Martin, Morgan, Ariel or Lotus. While other countries incentivise their car manufacturers, the UK is thinking about charging extra money from their customers.

At this point (or even for the past few minutes) you’ll say “OK, but 310 pounds a year is a small sum for somebody willing to buy a 40,000 plus pounds car” and, what can I say, you’d probably be right. And perhaps that’s exactly what the government thought: it’s not a lot of money so it won’t really affect sales, but it will bring more money to the state budget.

Jaguar Land Rover doesn’t agree: It sends a very negative message to the UK’s premium automotive industry,” JLR said in a statement. “The UK should be proud of its premium car manufacturers, which support huge numbers of jobs and investment, not specifically penalize them.”

The thing is, this might as well prove to be just the beginning. It sends a message about the government’s stance regarding this issue and it’s clearly not to the manufacturer’s taste. Right now, they must be wondering “what’s next?”