Used diesel cars - will tax increase?

DrEskimo

AdrianC said:

DrEskimo said:

Remember that VED is an additional duty that was primarily brought it to drive CO2 emissions down. It is not ring fenced tax that only pays for infrastructure. It was simply an additional duty to promote cars with lesser CO2.

Umm, no.

It's been there since the dawn of motoring, first levied in 1909. It used to be "road tax", hypothecated to maintain and build the road network - but it changed to be a contribution to general taxation in the 1930s.

It's changed the basis on which the amount is calculated a few times over the years... Back at the start, it was based on the fiscal horsepower of a car, based on the bore of the engine and the number of cylinders. In the 1940s, it was changed briefly to be based on the engine capacity, then to a flat rate. That was split into two bands by engine size in the late 1990s, initially 1100cc split, later 1550cc - applied to all cars, not just new ones. Then all new cars from 2001 came under CO2-based banding, widened in 2006. By 2017, the average new car was £30, a figure last seen in the early 70s, so they went back to a flat rate with a £40k list price "luxury" hike, and CO2 banding for the first year. By contrast, the 40yo-to-2001 1550cc+ rate is the direct historical successor to the old one-band flat rate, and is £270/year. 2001-17 cars with no official CO2 figure (non-EU imports or low-volume) are still done at the engine-size banding.

Historic cars were exempted in the late 80s, initially defined as 25yo+, then locked to 1/1/73 manufacture date, now rolling 40yr.

So, yes, it has reflected CO2... but only very briefly. 16 years out of a 111 year history.

Those were specifically road taxes though right? Were general taxes used to pay for road use as well?

My point was about VED specifically. Which is not the same as road tax.

AdrianC

DrEskimo said:

AdrianC said:

DrEskimo said:

Remember that VED is an additional duty that was primarily brought it to drive CO2 emissions down. It is not ring fenced tax that only pays for infrastructure. It was simply an additional duty to promote cars with lesser CO2.

Umm, no.

It's been there since the dawn of motoring, first levied in 1909. It used to be "road tax", hypothecated to maintain and build the road network - but it changed to be a contribution to general taxation in the 1930s.

It's changed the basis on which the amount is calculated a few times over the years... Back at the start, it was based on the fiscal horsepower of a car, based on the bore of the engine and the number of cylinders. In the 1940s, it was changed briefly to be based on the engine capacity, then to a flat rate. That was split into two bands by engine size in the late 1990s, initially 1100cc split, later 1550cc - applied to all cars, not just new ones. Then all new cars from 2001 came under CO2-based banding, widened in 2006. By 2017, the average new car was £30, a figure last seen in the early 70s, so they went back to a flat rate with a £40k list price "luxury" hike, and CO2 banding for the first year. By contrast, the 40yo-to-2001 1550cc+ rate is the direct historical successor to the old one-band flat rate, and is £270/year. 2001-17 cars with no official CO2 figure (non-EU imports or low-volume) are still done at the engine-size banding.

Historic cars were exempted in the late 80s, initially defined as 25yo+, then locked to 1/1/73 manufacture date, now rolling 40yr.

So, yes, it has reflected CO2... but only very briefly. 16 years out of a 111 year history.

Those were specifically road taxes though right? Were general taxes used to pay for road use as well?

My point was about VED specifically. Which is not the same as road tax.

It's the same thing. It stopped being hypothecated in the 30s, and became what is today called VED. The name changes over the years are irrelevant, whether it was ever called "Road Tax" or "Road Fund Licence" or when it changed. It's been called VED since the late 40s, at the very latest, and the Vehicle Excise Act 1949.
https://vlex.co.uk/vid/vehicles-excise-act-1949-808397709

DrEskimo

AdrianC said:

DrEskimo said:

AdrianC said:

DrEskimo said:

Remember that VED is an additional duty that was primarily brought it to drive CO2 emissions down. It is not ring fenced tax that only pays for infrastructure. It was simply an additional duty to promote cars with lesser CO2.

Umm, no.

It's been there since the dawn of motoring, first levied in 1909. It used to be "road tax", hypothecated to maintain and build the road network - but it changed to be a contribution to general taxation in the 1930s.

It's changed the basis on which the amount is calculated a few times over the years... Back at the start, it was based on the fiscal horsepower of a car, based on the bore of the engine and the number of cylinders. In the 1940s, it was changed briefly to be based on the engine capacity, then to a flat rate. That was split into two bands by engine size in the late 1990s, initially 1100cc split, later 1550cc - applied to all cars, not just new ones. Then all new cars from 2001 came under CO2-based banding, widened in 2006. By 2017, the average new car was £30, a figure last seen in the early 70s, so they went back to a flat rate with a £40k list price "luxury" hike, and CO2 banding for the first year. By contrast, the 40yo-to-2001 1550cc+ rate is the direct historical successor to the old one-band flat rate, and is £270/year. 2001-17 cars with no official CO2 figure (non-EU imports or low-volume) are still done at the engine-size banding.

Historic cars were exempted in the late 80s, initially defined as 25yo+, then locked to 1/1/73 manufacture date, now rolling 40yr.

So, yes, it has reflected CO2... but only very briefly. 16 years out of a 111 year history.

Those were specifically road taxes though right? Were general taxes used to pay for road use as well?

My point was about VED specifically. Which is not the same as road tax.

It's the same thing. It stopped being hypothecated in the 30s, and became what is today called VED. The name changes over the years are irrelevant, whether it was ever called "Road Tax" or "Road Fund Licence" or when it changed. It's been called VED since the late 40s, at the very latest, and the Vehicle Excise Act 1949.
https://vlex.co.uk/vid/vehicles-excise-act-1949-808397709

Ah OK.

My woeful historical understanding of road tax aside, the point I was making was that it's typically used to penalise those vehicles that are more 'polluting', right? Presumably even when it was based on engine size, this was simply a proxy for 'emissions'?

A move to EV could mean the abolishment of VED altogether, since the shortfall could just be recouped through a change in allocated taxes to transport or an increase in taxes from elsewhere.

Unless you wanted to specifically encourage the use of more efficient EVs (would be a bit pointless imo) or those who use the roads more, then you could look at road use or VED based on EV efficiency (Wh/mile).

NottinghamKnight

DrEskimo said:

AdrianC said:

DrEskimo said:

AdrianC said:

DrEskimo said:

Remember that VED is an additional duty that was primarily brought it to drive CO2 emissions down. It is not ring fenced tax that only pays for infrastructure. It was simply an additional duty to promote cars with lesser CO2.

Umm, no.

It's been there since the dawn of motoring, first levied in 1909. It used to be "road tax", hypothecated to maintain and build the road network - but it changed to be a contribution to general taxation in the 1930s.

It's changed the basis on which the amount is calculated a few times over the years... Back at the start, it was based on the fiscal horsepower of a car, based on the bore of the engine and the number of cylinders. In the 1940s, it was changed briefly to be based on the engine capacity, then to a flat rate. That was split into two bands by engine size in the late 1990s, initially 1100cc split, later 1550cc - applied to all cars, not just new ones. Then all new cars from 2001 came under CO2-based banding, widened in 2006. By 2017, the average new car was £30, a figure last seen in the early 70s, so they went back to a flat rate with a £40k list price "luxury" hike, and CO2 banding for the first year. By contrast, the 40yo-to-2001 1550cc+ rate is the direct historical successor to the old one-band flat rate, and is £270/year. 2001-17 cars with no official CO2 figure (non-EU imports or low-volume) are still done at the engine-size banding.

Historic cars were exempted in the late 80s, initially defined as 25yo+, then locked to 1/1/73 manufacture date, now rolling 40yr.

So, yes, it has reflected CO2... but only very briefly. 16 years out of a 111 year history.

Those were specifically road taxes though right? Were general taxes used to pay for road use as well?

My point was about VED specifically. Which is not the same as road tax.

It's the same thing. It stopped being hypothecated in the 30s, and became what is today called VED. The name changes over the years are irrelevant, whether it was ever called "Road Tax" or "Road Fund Licence" or when it changed. It's been called VED since the late 40s, at the very latest, and the Vehicle Excise Act 1949.
https://vlex.co.uk/vid/vehicles-excise-act-1949-808397709

Ah OK.

My woeful historical understanding of road tax aside, the point I was making was that it's typically used to penalise those vehicles that are more 'polluting', right? Presumably even when it was based on engine size, this was simply a proxy for 'emissions'?

A move to EV could mean the abolishment of VED altogether, since the shortfall could just be recouped through a change in allocated taxes to transport or an increase in taxes from elsewhere.

Unless you wanted to specifically encourage the use of more efficient EVs (would be a bit pointless imo) or those who use the roads more, then you could look at road use or VED based on EV efficiency (Wh/mile).

Hypothecation of taxes typically doesn't work very well as exceptions are often and rapidly made if the taxes coming in are too low, or too high, for the stated need. The obvious example is NI, the fund is supposedly ring fenced for use for nhs, pensions etc, but the government pays in, and draws out, when numbers vary in terms of inputs and expenditure. 
Historically the polluting effect of any vehicle was not considered certainly over 20 years ago, engine size was seen as a proxy for cost, earnings or ability to pay, you afford something bigger and more expensive then a progressive tax policy determines you can afford to pay more tax.  

AdrianC

DrEskimo said:

My woeful historical understanding of road tax aside, the point I was making was that it's typically used to penalise those vehicles that are more 'polluting', right? Presumably even when it was based on engine size, this was simply a proxy for 'emissions'?

Not really. Engine capacity is a fairly poor metric for judging fuel efficiency or emissions.

Fuel duty, otoh, is an excellent one. Something efficient but used a lot pays more than something inefficient but barely used. However, fuel duty also penalises fuel that's not used for road transport...

B'sides, it wasn't even based on that between the late 40s and the late 90s - it was just a single flat rate, the same for all cars from a 600cc 2cv to a 6 litre Cadillac.

I have one vehicle that has, typically over the last few years, cost me a few times more in VED than in fuel duty. It's only just over a two litre engine. From April, it will be free VED. I probably get through as much fuel in garden equipment per year than in that vehicle.

Mickey666

Seems to me it's all a messy, inconsistent area because in the past these various vehicle and fuel taxes were simply a way for government to raise revenue, but in recent years they've become 'environmentalised' and tweaked/justified as ways of changing behaviours to reduce pollution.  
If government is serious about reducing carbon emissions then any dis-incentives should be focused on the fuell, not the vehicle.  I'd bet there are plenty of 'gas guzzling' 4x4 second cars that cause less pollution than company rep-mobiles driving around the country all day, every day.
The point about fuel duty penalising road transport is an interesting one though.  Yes, it does, but why shouldn't it if the issue is really about reducing carbon emissions?  Or is it ok to continue growing the economy as long as people have reduced personal freedom when it comes to their own cars?  Seems to me that everyone worries about the environment until it come to the economy, which we must keep growing at all costs otherwise people panic about recession. 
Well something is going to have to give and my bet is continued lip-service only towards the environment because that's an issue that's always going to be further away than the next general election.  Meanwhile, the private motorist will continue to be heavily taxed because motoring is basically cheap and efficient compared to almost any other form of transport and can therefore bear the cost of such taxes.
EVs are going to be hugely disruptive when it comes to taxation because it won't be acceptable to increase electricity prices yet government will need to replace its fuel duty revenues somehow.  I reckon pay-per-mile is on the not to distant horizon . . . especially if new fossil-fueled cars really are banned by 2025 or thereabouts.
Interesting times;)

thegentleway

Mickey666 said:

The point about fuel duty penalising road transport is an interesting one though. 

It’s a particularly important point in the U.K. since rail network has been so underfunded. Goods shouldn’t be transported by lorries but the government doesn’t offer any alternatives...

AdrianC

thegentleway said:

Mickey666 said:

The point about fuel duty penalising road transport is an interesting one though. 

It’s a particularly important point in the U.K. since rail network has been so underfunded. Goods shouldn’t be transported by lorries but the government doesn’t offer any alternatives...

Road and rail do different jobs, of course - rail can't take things direct from warehouse to customer.

Grumpy_chap

What do those charts show please Adrian?
Were we really transporting 8 billion-tonne km of coal by road right up until 2014?

AdrianC

Grumpy_chap said:

What do those charts show please Adrian?

The volumes of freight on road and rail each year... Road is fairly static. Non-coal rail is gently increasing.

What they don't show is the relative split... Road is about 150bn t/km/year... 10x rail...

Were we really transporting 8 billion-tonne km of coal by road right up until 2014?

Remember we were still generating more than a third of our electricity from coal that recently...