Is Road Tax applying tax twice?

djcat

Hello,

just paid my road tax and had a thought about it. As I am paying with my net salary after income tax, wouldn't that mean its tax paid twice? If I consider my income tax bracket of 40% and given I pay 270 Pounds, am I not in fact paying 378 from my gross salary?

If so, can I claim that difference back from HMRC?

Just a thought, after all every little helps (as Tesco taught us).

dtaylor84

Best not to think about fuel, then.

You pay 20% VAT on fuel and duty, with income that has already been taxed at 40%.

aveylee

Technically it is a road fund license and not a tax (However in reality it is a tax).

Not that it matters as there is no legal bar to paying tax from taxed income (VAT, duty, Council Tax etc. are all paid from already taxed income for example).

The good news is that 'Road Tax' is 'outside the scope' of VAT (as is for example most forms on insurance) so you don't pay VAT on it. However VAT may be payable on some associated services e.g. Post Office form completion services.

antrobus

aveylee wrote: »

Technically it is a road fund license and not a tax (However in reality it is a tax)....

Technically it is Vehicle Excise Duty which is an annual tax on the ownership of a road vehicle. The 'Road Fund' was abolished in 1937.

paddedjohn

Every single penny in circulation is tax at some time or other.

Gary_zero

You pay tax on your salary then pay your local plumber or whatever and he pays tax on it, he in turn then spends it at the local butcher who is again taxed it's endless.

djcat

Yes, but I don't pay the butcher twice so why should I pay the national government twice? I am not even talking about council tax which is for the local authorities, so I understand there is no way to get the gross to net "road tax" back?

somethingcorporate

No, nor is there any way to get any of the other money that is taxed twice back (stamp duty, IHT, Capital Gains tax) all paid out of money that has been taxed once already.

That's life I am afraid.

John_Pierpoint

paddedjohn wrote: »

Every single penny in circulation is tax at some time or other.

Dream on; a sizeable proportion of our fiat currency is deficit financed.
In other words it is being minted out of thin air (or copper plated steel to be more accurate). It is intended to keep the merry-go-round turning and inflate away the debts.