Britain says VW owners will not face higher car tax

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LONDON, Oct (HKSE: 3366-OL.HK - news) 2 (Reuters) - British owners of Volkswagen (LSE: 0P6N.L - news) diesel cars fitted with emissions-cheating software will not face a higher annual vehicle tax, the government said on Friday.

Britain's annual duty on vehicles, which ranges from zero to 505 pounds ($767.55), is linked to a car's engine size and specifically its carbon dioxide emissions.

Many diesel cars fall into the exempt category, a factor which has made them popular with consumers.

"The government expects VW to support owners of these vehicles already purchased in the UK and we are playing our part by ensuring no one will end up with higher tax costs as a result of this scandal," Transport Secretary Patrick McLoughlin said in a statement.

On Wednesday, VW said about 1.2 million vehicles in Britain, including Audi (LSE: 0FG8.L - news) , Seat and Skoda cars, were affected by the emissions software and British customers would be contacted to get their vehicles corrected.

The British government has launched an investigation into the extent of emissions-rigging and whether the software is being used by other manufacturers, although it said there was no evidence of this.

"I have been pressing for action at an EU level to improve emissions tests and will continue to do so," McLoughlin said. "I have also called for a Europe-wide investigation into the use of 'defeat devices', in parallel to the work we are doing in the UK." ($1 = 0.6579 pounds) (Reporting by Michael Holden, editing by Elizabeth Piper and William Schomberg)