Now that the Government is expected to announce that the sale of new petrol and diesel cars will end by 2030, the Chancellor is seriously considering a “pay as you drive” tax on motorists to replace the lost future tax income moving away from fossil fuels and into EV as well as hydrogen fuel.
However, campaigners view this idea as a “poll tax for motorists” that will especially hit drivers living in remote parts of the country disproportionally. A similar scheme was ruled out by Labour in 2007 amid uproar that drivers could be charged up to £1.50 a mile.
But the proposed policy has come back, with The AA warning of a driver revolt and urging ministers to come up with a ‘more imaginative solution’.
At present there are only a handful of places where charging is in place, such as the M6 Toll in the Midlands, the Dartford crossing on the M25, London’s Congestion Zone and a handful of small tunnels and bridges.
A nationwide policy is being considered amid fears the switch to electric vehicles will leave a massive tax shortfall, in fuel duty and vehicle excise duty.
However, any move would lead the Government to undermine its own policy to encourage people to drive electric cars because its much cheaper than fossil fuel vehicles.
It came amid reports Boris Johnson is going to reduce the deadline for the sale of new petrol and diesel cars by ten years to 2030 in line with several countries in the EU.
A ban on the sale of new petrol and diesel cars will have a huge impact on the Government’s income, with VAT on fuel currently generating around £6billion a year.
Fuel Duty, currently charged at 57.95p per litre on petrol and diesel vehicles, is on course to raise £27.5billion this financial year.
Finally, Vehicle Excise Duty (VED) – which is charged on the purchase of cars based on their emission levels – generates £7.1billion.
[Image source: Shutterstock, Nov 2020]
Imaginative solutions needed say AA
Edmund King, AA president, urged the Government not to adopt a road pricing scheme as he warned it would be incredibly unpopular with motorists.
‘While the push toward electric vehicles is good for the environment, it is not good for the Exchequer,’ he said.
‘The Government can’t afford to lose £40bn from fuel duty and car tax when the electric revolution arrives.
‘It is always assumed that road pricing would be the solution but that has been raised every five years since 1964 and is still perceived by most as a “poll tax on wheels”.
‘We need a more imaginative solution and have proposed “Road Miles” whereby every driver gets 3000 free miles, with one third more for those in rural areas, and then a small charge thereafter.
‘Combined with commercialising the roads with an adopt-a-highway scheme with naming rights such as the Minecraft M1, Manchester Utd M6 or Adidas A1, this should be prove a more popular solution.’
There will be increasing pressure next year on the Government to find ways to claw back all the money that has been given out to tackle the Coronavirus pandemic. If a new tax scheme is seen as having green benefits, you can be sure that they will try to introduce it, even though it may be political suicide for the Conservatives.
It seems that even if the Tories lose at the next General Election, the Labour party will continue to do the same thing if they gain power, if not more so. Motorists are already having a hard time at the moment, so to introduce this scheme would see revolt amongst motorists of all kinds and perhaps direct action is needed to make the politicians aware that it will be not accepted by drivers under any circumstances.
What do you think about a poll tax for motorists? Do you think it is a fair scheme or will it create untold misery for drivers? Would you fight back against it? Let us know in the comments.
Goverment needs money. They have a problem right now because lockdown 1 meant we drove less, less fuel, less tax.
They plan we will go all electric which means they cannot get the money for the NHS etc. from fuel duty. As fossil fuel use declines they can continue to raise fuel duty (probably sold as “a green incentive”), but in the end once all cars/lorries are electric they will have no income.
Therefore they will need to raise the money some other way.
Higher road tax on the car itself? it would have to be enormous to replace the annual fuel duty income. Probably politically unacceptable.
Road use tax. All cars would have to have a transponder leading too a monthly bill. Not necessarily full tracking so the govt knows where you are, but something that knows the price for a particular piece of road, and just totals it up without transmitting the route/date/time data to the govt. Buy you wold probably want the the tracker to record it, so that if you get a massive unexplained bill the data can be looked at to prove it was faulty. It would allow higher pricing in cities, and low prices for rural roads, supporting the rural backbone of Britain.
Maybe you get a small free mileage allowance per year.
Basically, the Govt. needs money. It cannot tax fuel if we are all electric. Therefore it will tax road use. Therefore you will have a transponder.
Electric cars get a free ride at present from the Treasury point of view. The idea that they are cheap because ” it only costs a few pence to charge” ignores the big picture. Death and taxes, remember!
I think Hydrogen will be taxed the same way as fossil fuels, hence why the Government is pushing it so readily.
Have you ever looked into the production of hydrogen, it uses and electrolysis and guess what, this process krQE8requires a lot of electricity. So I cannot see the logic in using electricity to produce hydrogen, then using the hydrogen to produce electricity power your car.
No I’ve not looked into the production of hydrogen, you have a good point, I wonder how much energy is used to refine fossil fuels at the moment?
There’s potentially going to be a lot of unemployment if this scheme goes ahead, I for one have had to continue to work through this crisis travelling over 30 miles each way to work & back, it already costs me money to do this as I am not subsidised by my employer. If the cost of motoring rises further I among others will need to be looking as to the economy of working away from home bearing in mind the current climate & job availability it’ll be difficult to find employment closer to where I live.
I think that if road charging or other means costs the motorist no more than the fuel duty for the average car then if we were all electric that would be ok. But what happens in the interim if you have a conventionally powered car? Who pays for the charging infrastructure or would that have to come out of increased charges elsewhere and it would also be an opportunity for the Government to increase their take from the motorist anyway.
Consider Bob, at this stage it costs us no more… what happens when the “Escalator” is introduced? Remeber when the Prescription charge of 10p came in… and now you pay £9.15. How much do you think your Road Tax will be in 5 years time?
You worry about how you will afford the extra road tax, but surely you’re missing the point? If you’re using an EV, you won’t be buying diesel, so you’ll be quids in (and moreso if you can use solar PV at home as your power source). *That’s* precisely the money the government is targeting with road tolling, to fill the Exchequer’s hole in the fuel duty and VAT take from fossil fuels.
With the Govt planning to increase taxes by £46 billion next year (yep that’s right) you can be sure the motorist and property owners will get hit and he may even do a raid on capital and pensions.
They could easily put a tax on the electricity used from recharging points if they wanted.
A poll tax on drivers would only be fair if it was linked to one’s mileage.
How would the government operate a tax based on miles driven?
A black box that records all your trips by GPS then charges you according to how far you have travelled, the types of road used and the time of day you have used them. So country lanes late at night cheap, major city during rush hour very expensive. Perfect for someone like me who only drives short distances in the country and uses a bike a lot as well. 🙂
Just because the government cannot tax electricity in the outrageous manner that they tax diesel and petrol does not mean they should be allowed to introduce general road pricing in an attempt to compensate for this. How would they implement road pricing? Would it mean installing ANPR cameras every mile on every road? Apart from the unjustified coat of such a system, the privacy implications are horrendous! I’m not sure whether it would be ‘Brave New World’ or ‘1984’ . If it was only done on main roads, would everywhere else become a monster rat run?
Probably a compulsory black box in every vehicle.
They can also keep a track on those drivers that break speed limits and any number of other abuses. In my book, excellent. Driving clearly needs to be controlled more as since March it has steadily gotten worse.
Through the hydrogel/vaccines we will have to have to leave the house. Taxed and monitored to move, travel and live, those that are left that is.
Well yes Grumpole, the Tories have signed their death warrant promising things that are impossible to achieve, this is not going to end well and I foresee civil disruption ahead that will make the poll tax riots look tame in comparison.
I can see lots of failures of these black boxes…. water ingress etc.
Road poll tax is totally unacceptable and an infringement upon basic liberties to freely use the Highway for personal reasons. Tax delivery and freight hauliers such as Amazon instead.
Brilliant idea, tax hauliers and delivery services, and then just remember who will ultimately pay, us.
Join the discussion…Highways have to be paid for, they are not free.
Only problem with taxing delivery and freight drivers is seeing that the huge majority of freight travels by road to get to the shops the price increases that freight and delivery firms would have to impose would mean higher prices in the shops which would probably outweigh any cost imposed by government.
Taxing Amazon is a great idea, along with all the other companies who ship money overseas and through creative accounting make little or no profit in the country. As an example, McKinsey & Co Inc, an American management consultancy whose registered office is in the tax haven state of Delaware, USA, paid no UK tax in 2018. Despite raking in £740million in that tax year. It’s far more now due to the contracts thrown about like confetti by the UK government due to COVID. There’s something far wrong with the tax regime when companies earning gazillions pay nothing and the man in the street is squeezed until he bleeds. But don’t expect anything to change soon.
I believe that road tax should be reintroduced for electric vehicles as although they are helping the environment they are still causing wear and tear to the roads infrastructure. This would overcome the shortfall without penalising all motorists.
Road tax and insurance should also be introduced for cyclists which would bring in additional revenue for the Government.
I’m an ev user and think this is the simplest system to implement and I think most likely. imo its why the monthly payment option was introduced. eventually I see road tax (or whatever its called these days) being a lot more expensive. I see a minimum charge of say £10 a month, scaling all the way up to £50, or even £100 depending on however they want to incentivise.
Why tax cyclists? The vast majority use footpaths…. But wait, let’s tax pedestrians, mobility vehicles, scooters, oh and horse too
No they do not use footpaths. The majority use cycle lanes. Bits of road taken away from vehicle users. All cyclist should gave to pay road tax and have insurance. A level playing field. Motorbikes pay do why not pedalbikes,?
Although most cyclist don’t know or don’t care, cycling on the pavement is illegal for adults, though like most offences committed by cyclists the authorities refuse to bother prosecuting. I have seen a cyclist hurtling round a blind corner crashing into an innocent pedestrian then remonstrating with the person they injured for getting in their way. And no they never bothered to inquire about how badly they had injured the innocent pedestrian. Typical!
Yes, let all road users pay towards the upkeep of the roads. Pedestrians are not classed as road users, as their only usage is to cross roads, and they can pay for pavement maintenance through Council Tax. All road users, including cyclists, mobility scooters, & horses with or without a carriage / cart, should have to pass a proficiency test, be insured, wear appropriate safety equipment and pay a form of road tax. Obviously a car would pay more than a bicycle
Very few use footpaths. Even fewer use cycle paths.
I am enjoying tax free with an electric car at the moment, but don’t expect it to be free forever. I would suggest it should be paid on mileage with a compulsory check once a year . This could be done at an MOT testing station for example . In the interim if you did not want to run up a big bill you could enter your own mileage to your account on line and make a payment anytime.
I can see a big masrket in companies winding back speedos again… Ill just have to dig my kit out.
How about a tax for the length of time you are using the vehicle ! It would have to be a transmitter device that was tamper proof but private cars could be charged differently to commercial vehicles and taxis. Those who use the roads the most pay more. Who pays for the fitting would be a big issue.
My insurance is based on the miles that I drive. It is operated by ‘bymiles’ and I have a transponder fitted into my car diagnostic port. So simple and as I am low mileage user I save a lot of money on my insurance. The technology is simple and indeed Google do this every month anyway somehow. You could also add speed restrictions into the system as it is GPS driven and connected to the car’s electronics. All the technology is there already.
just because the electric car is not taxed at the moment does not mean that it will continue. If we go all-electric then the car user will pay for the roads anyway. Just look at the history of propane conversions and see how the tax regime has changed over the past 60 years dependant on how the Government wanted to get money out of the motorist.
And look how diesel car tax systems have changed to suit whatever argument the Governments wanted to put forward.
V good point, I can quite easily see electric charging based on how much electricity you’ve added to the batteries and duty on top of that, how that is measured I am not sure.
Why do you think we are being encouraged (if not coerced) into having Smart Meters fitted?
Smart Meters are capable of variable rate charging. EV home chargers, the installation of which is being carefully monitored and recorded, have the ability to talk to Smart Meters. Think about it… ! How easy it would be to slap a ‘fuel duty’ onto the cost of electricity used to charge an electric vehicle.
Don’t underestimate the true purpose of Smart Meters – despite the government’s spin, they are not for the consumer’s benefit.
Yes, they would know if you’re using a car charger at home and how much you’ve used. I have a feeling that we’re going to see some kind of universal charging system for all forms of energy, based on smart metering and with carbon offset fees and taxes automatically built into it.
Of course the new black boxes will actually reduce the range of your electric car.. like turning the lights on, turning on the heater or radio.
Those stuck in traffic jams pay most…that’ll ease that one out then.
Petrol duty has a not kept pace with inflation, Electric Cars Road Tax-free, these two represent a loss of income for the Country. With a national debt as high as after WW2 rises in taxes are inevitable. The Lorry and Motor car will have to take its share of the rise so it is not worth bleating about, indeed if we use the roads it is our moral duty to pay our share.
Road Tax does not just pay for roads. Public Transport, Railways, Hospitals, Education & Defence are all essential to our way of life so all taxes relating to motor vehicles will increase. This is a fact of life.
The suggestion that costs have not kept pace with inflation doe not mean a reduction in the fiscal take for the Government.. They have never “had” this money, they cannot therefore represent a “loss” of income. You cant lose whet you never had.
I think people are missing the point entirely. Road Tax is supposed to pay for the upkeep of roads and not be a penal element for how fuel and emission efficient your vehicle is. Wear and tear on our roads is equal whether it is an Electric or Internal Combustion derivative of transport. Indeed due to the increased Torque of the Electric vehicles there is likely to be more wear on the roads at any stop start point. Farmers should not be exempt from road tax either. A much fairer way to do it is to accept all road vehicles create wear and tear on the roads regardless of propulsion method. Tax accordingly by wheels in contact with the road and axle weight. Regarding the tax on high polluting vehicles that is already paid for by increased use of fuel and the huge tax take on it.
The most sensible comment on this thread!
Most vehicles use tyres. The more you use a vehicle, the more tyre wear you get. Governments have a poor history implementing tech-based solutions so forget about GPS for a mileage charge. Tax the tyres; it’s simple. The bigger the tyre, the more wear to the road surface. It would give a level playing field to EVs and ICE vehicles and motorcycles.
Join the discussion…
Would be a valid point except that “Road Tax” or Vehicle Excise Duty as it is actually called ceased being “supposed to pay for the upkeep of the roads” in 1937. It is amazing that 83 years later people are still trotting out this nonsense! Looks like people aren’t missing the point Geoffrey.
How about stop over taxing most of the population? And control expenditure across the country and stop squandering our tax money!
Being taxed to death. We are all working to have half our money forcibly removed from us.
The sooner the better for me. I have a Motorhome, don’t travel very far in it but since I got it in Sept 18 I have paid £530 in road tax, the MoHo hasn’t got 3K on it yet! I also traded my 2.0L Euro 6 diesel car £30 PA for a PHEV and saw the tax go up to £130 ish!! Where is the incentive in that!!!
Using mot test mileage is one way to record how far you have been, with changing cars you would have to report you mileage as a seller and the buyer would do the same.
That way you would only be-charged for miles driven, means mine will be cheaper but a busy rep will have to stump up more.
I am all in favour of a pence per mile road tax on all major roads, just like a toll road charge, but vehicle road tax would have to be scrapped or greatly reduced. It is not beyond today’s technology to collect the data using technology used by mobile phone masts.
Putting extra tax on fuel will automatically charge cars with inefficient engines and those people with high mileage.
Heavier vehicles should pay more tax as they cause more damage to roads leading to higher maintenance costs.
Every vehicle should pay a yearly tariff using a similar system to the one we use now to use the road system, the charging points for electric vehicles should have connections that gather data while charging regarding the amount of energy the vehicle is using and tax that energy at point of sale, just like the excise duty is gathered that the government impose on fuel, this system is just an adaptation of the existing one and should not provoke widespread resistance.
Get Real an Electric Vehicle is A Vehicle. All Vehicles wear out Rds. If you want Roads, you have to pay Vehicle Excise Duty. Can’t keep doing what they are doing forever for free. Everyone needs to pay their bit. Pay per Mile is Ludicrous and we should all be getting our protests known by contacting your local MPs
Lets face it the millions of low to middle earners will always fare the worst whilst the millionaires who can pay experts to avoid taxes will always be better off. For example , Lewis Hamilton a brilliant driver who has done well , I remember reading he bought his private jet via I.O.M or Ireland to avoid tax. This sort of thing must happen every day. Let the massive earners – of the Tech. giants pay more , but then again they will pay experts to get away without paying more. Apparently , it takes just 35 minutes for Mark Zuckerberg to earn a million dollars , I wonder what he does with it all. I would hope some good for someone / groups of people. Maybe he builds hospitals ? Whatever schemes are introduced there will always be winners and losers. I am 68 and I think one of the problems is that because you know what has gone before e.g. telephone operators who put you through to someone to deal with your query, which was great, technology now helps companies but just creates much wasted time and frustration/anger for consumers of a certain age ( me). The younger generation just accept this has the norm but it is crap. I am rambling sorry.
If the Government want a full scale revolution on their hands that the police would not be able to handle then by all means just go ahead with this hair brained scheme. We know that money is needed to help put our countries finances back on track but this is not the way to do it, start taxing the large companies at the proper rate, stop making large estates and farmers exempt from Inheritance tax and yes make the rich pay more. The people at the bottom of the food chain i.e. the ordinary man and woman in the street always get shafted while you have the likes of the House of Lords, each member claiming their £300 a day just for being a damned nuisance to the country get rid of them and we can save a small fortune. The list of what I personally would do is far to long and in some cases to extreme to put into print, but if Boris wants a few tips on how to save this country Billions then he can always call me as he has my number.
Absolutely shocking idea! The obvious solution is to can that great white elephant vanity project known as HS2. That would deliver a £100bn saving.
Cyclists should start paying a road fund tax, along with e scooters – not as much as vehicle drivers, but they should pay something; after all they are road users too.
The Uk Governent, as all governments needs to move away from a tax business model (tax originally was a temporary measure), they need to own or create businesses which generate income. They should use fin-tech to also create revenue.
So, lets say the charge starts at 50p per mile… My salary is nett £300 per week, pathetic ist it, so that annual take home of around £15,600. Now if we use an average of 9000 miles annually that will make the new tax £4500.. or just under 30% of my take home pay. I have had jobs where I travel 90 miles per day, which at 50p per mile, would cost me £11700 in new road tax… or around two thirds of my take home pay…
Where do I put my name down for that Universal Credit thing?
Well done Tories…a policy that will lose you millions of votes in one easy step.
The way I see it, is that the government has put us in this position, the government has placed more than one lockdown, people can be responsible for them selves but instead the government took away are civil liberties, which has caused the government to lose money,to then start charging drivers stupid amounts of money to fix Thier mistake when over a million people have lost jobs and many have lost money for being unable to work and the government think its acceptable to rob people blind for Thier own miss deeds is utterly unacceptable if they need to field the void the can start a charity campaign or some other shit instead of taking from hard working people or why don’t they increase corporation tax for a change and make millionaires foot the bill
The simplest way is to make a small charge on fuel ( including electric charging) so that every road user will pay according to usage and fuel consumption in relation to road wear for which the RFL was originally intended.