EVs to pay road tax from 2025

daveyjp

@PaulLewis on twitter.

"For the last 11 years Chancellors have NOT implemented the inflation rise in fuel duty. But it has to be specifically stated in the Budget or it will happen. If the Chancellor scraps it and keeps the 5p a litre cut as well that will cost £5.7bn which will have to raised elsewhere"

facade

daveyjp said:

@PaulLewis on twitter.

"For the last 11 years Chancellors have NOT implemented the inflation rise in fuel duty. But it has to be specifically stated in the Budget or it will happen. If the Chancellor scraps it and keeps the 5p a litre cut as well that will cost £5.7bn which will have to raised elsewhere"

What about the massive price rises at the pump, 17% of which is extra VAT that they are raking off, or doesn't that count as tax revenue? 

Herzlos

Stubod said:

..still wondering how they will recoup the tax that will be lost from petrol/diesel when most cars go electric. The tax generated from this still needs to come frrom somewhere?

...possibly a tax per mile using gps based tech??

I don't think anyone knows how the usage tax will work, as most options are either really unreliable (MOT readings) or really expensive (GPS) or invasive (GPS).

It may become possible for EV chargers to record the actual energy used and bill at a different rate, but even then people in no rush would just use a 2kw charger and be indistinguishable from any other household appliance.

The easiest thing to do is probably to just whack the VED rate up to some approximation of the fuel tax for the average user, to something like £100/month.

Aretnap

daveyjp said:

@PaulLewis on twitter.

"For the last 11 years Chancellors have NOT implemented the inflation rise in fuel duty. But it has to be specifically stated in the Budget or it will happen. If the Chancellor scraps it and keeps the 5p a litre cut as well that will cost £5.7bn which will have to raised elsewhere"

Plenty of time to announce it between now and March. We shall see.

Obviously the extra money will have to be found from somewhere - be it tax, spending cuts, increased borrowing or (if we lucky) economic growth. Successive chancellors have managed to find it every year since 2011.

I'd certainly be willing to bet, perhaps not my mortgage, but certainly a tank of petrol, that fuel duty does not rise by the full 12p in March.

Added: Hunt on fuel duty this morning "Let me clear that up, that is not government policy. We will make a decision on that at the next budget in the Spring."

Petriix

I don't have a problem with paying VED on my EV. But I do have a problem with pre 2017 diesel cars only paying £20 per year. It's completely irrational to retrospectively add VED to EVs but not do so at a similar or higher rate for more polluting vehicles.

Herzlos

The problem is with making retrospective changes and how fair that may or may not be.

I do suspect that the rates for the emission based cars will creep up over time though by as much as allowed (I think it's tied to an inflation metric)

[Deleted User]

VED is a nominal pollution tax and is nothing to do with the roads - local repairs are done by the council, national road works are done from central government funds.

There is certainly an argument to revert to road tax where you are charged for the damage your vehicle does to the roads, rather than directly link it to the pollution, provided the tax goes for the roads. I don't drive a lot (I cycle to work daily, my 2014 plate car is coming up to 52,000 miles) and I pay £20 a year for a diesel engine which clearly doesn't cover the wear and tear on the roads or the pollution.

The simplest thing would be for a chancellor to finally bite the bullet and scrap VED and put the cost on fuel so the more you drive, the more you pay and it would also encourage people to use more efficient cars or not drive when they didn't need to. I have zero incentive (beyond the fact it'll screw the DPF) to not drive to work daily and crawl through the city every morning because the fuel is affordable. If I was paying £3 a litre and getting 20mpg it would make me think about when journeys are necessary. As I happen to like cycling and like saving money, I ride the bike and do pretty much zero wear/tear to the roads but my council tax still pays for them to be repaired.

Ectophile

Deleted_User said:

VED is a nominal pollution tax and is nothing to do with the roads - local repairs are done by the council, national road works are done from central government funds.

It isn't really that any more.  It was for a few years, but then people started buying more efficient cars, and the government lost too much money.  It's now basically a car tax, with extra added on if you can afford an expensive car.

But at least the government didn't suddenly start taxing existing cars at the new rates, which is what they are going to do with EVs.

Car_54

Ectophile said:

Deleted_User said:

VED is a nominal pollution tax and is nothing to do with the roads - local repairs are done by the council, national road works are done from central government funds.

But at least the government didn't suddenly start taxing existing cars at the new rates, which is what they are going to do with EVs.

Isn't that what governments have previously always done? I.e. new rates announced in budget, then applied to all existing cars.

Aretnap

Car_54 said:

Ectophile said:

Deleted_User said:

VED is a nominal pollution tax and is nothing to do with the roads - local repairs are done by the council, national road works are done from central government funds.

But at least the government didn't suddenly start taxing existing cars at the new rates, which is what they are going to do with EVs.

Isn't that what governments have previously always done? I.e. new rates announced in budget, then applied to all existing cars.

They've periodically changed the banding system radically - from a flat rate, to bands based on engine size, to bands based on emissions etc. Existing cars have always seen the tax for their band increase each year, but completely new banding systems have only ever applied to new cars.

I'm willing to be corrected, but I can't recall a precedent for existing zero rated cars becoming non-zero rated.