In light of recent discussion, I decided to find a bit more information on
this subject matter. I came across this website which provides some
examples and a concise description of how it worked. All relevant content
pasted below.
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The "Horsepower Tax"
Mass produced American cars were popular in the UK due to their low purchase
cost. In 1921 the so-called "horsepower tax" was introduced based on the
1906 Royal Automobile Club (RAC) formula. The annual tax was #1 (UK Pounds)
per horsepower.
The calculation was partly based on the bore of an engine and thus caused
American cars to be badly affected. A Ford Model T at 22.5hp paid #23 (UK
Pounds) instead of the previous Road Fund Licence of #6 6s (#6.30) (UK
Pounds), whereas a Morris Cowley at 11.9hp paid just #12 (UK Pounds).
This Tax continued until 1947 when it was replaced by a flat rate system.
The narrow bore/long stroke engines it had encouraged now went out of
fashion.
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See http://www.krbaker.demon.co.uk/britcars/facts.html , and to learn more
information on motoring taxes and vehicles prices circa 1949.
Kai
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