Car tax changes could make the cost of driving ‘super expensive’ for thousands of drivers

Martin Lewis gives money-saving advice on VED car tax

The Chancellor is said to be considering a new pay per mile system to replace the current Vehicle Excise Duty (VED) charges and fuel duty costs. The scheme would see drivers charged based on how many miles they travelled rather than a flat emissions based fee.

However, Tom Leathes, spokesperson for has warned costs could be “pretty heavy” for some road users.

Speaking exclusively to, he said: “You have lots of stories about people moving out of cities and commuting more which again is going to make this super expensive so it does feel pretty big.

“The calculations we have done, it could be pretty heavy in terms of cost.

“If effectively you’re going to be charged let’s say £15 per day for a 20-mile round trip. That’s £70 per week. If you’re going to be doing it every week it could be around £4,000 per year.”

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The calculations are based on Mr Leathes prediction the costs could be in the region of 75p for each mile.

Motoring lawyer Nick Freeman has previously predicted between a 75p to £1.50 per mile charge but warned this could change based on a range of factors.

He warned this could include the time of day journeys are made as he claimed drivers could end up paying more in rush hour.

The Treasury is eyeing up the move after informing the Chancellor of a £40billion budget black hole in public spending through the switch to electric cars.

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As more drivers make the switch to fully-electric models, less money will be collected through VED charges and fuel duty.

Electric cars are currently fully exempt from any road tax fees or city Clean Air Zone charges but this is likely to change.

Although it has not been confirmed whether electric cars would be included in a pay per mile charge, the system would work fairly across different fuel types.

However, Mr Leathes has warned the coronavirus pandemic could have lasting impacts on road use which could undermine any tax updates.

He told “It’s not what people need right now. We understand that of course the economy is in a situation where it needs to recover itself and that’s going to mean everyone gets hit.

“But we are literally in the middle of the pandemic right now.

“It’s hard to talk about these things without talking about Covid, there’s been a shift in behaviour away from public transport and towards driving because it’s safer.

“The two may not overlap because you might come out of Covid and everything is ok and everything goes back.

“But we don’t know how behaviours are going to change so this feels like a particularly sensitive thing to push on people.”

He added: “They are using the stick on cars rather than the carrot for leading to more environmentally friendly cars which it feels like they should be putting more of their focus.”

The Department for Transport (DfT) said the Government has not yet confirmed it will introduce a road pricing system.

However, they added the DdfT will need to ensure motoring taxes keeps pace with the change on the roads as more drivers switch to electric models.

They said any changes to the tax system will be considered by the Chancellor and announced in due course.

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