‘No plans’ for road pricing despite £35billion fuel duty loss

Jeremy Hunt announces changes to electric vehicle tax

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

A report was released in February last year in which the car taxation system of road pricing was a suitable way of raising money from motoring in the coming years. The Government was warned that it could lose out on as much as £35billion from the failure to reform motoring taxation.

This would be down to the loss of revenue from both fuel duty and Vehicle Excise Duty, as neither are currently levied on electric cars.

The Transport Committee argued that the ban on the sale of new petrol and diesel vehicles by 2030 and other net zero goals in 2050 require major changes to be made.

The previous report argued that any changes must ensure that EV owners pay to maintain and use the roads they drive on.

At the same time, it stated that incentives must be protected to help drivers purchase zero emission vehicles and not cost motorists more overall.

Last year, the Government announced that Vehicle Excise Duty will be levied on electric vehicles from 2025. 

However, the Transport Committee has noted OBR forecasts that this could only raise £1.6billion a year by 2027/28.

It is also estimated that VED only contributes around 20 percent of revenue from motoring taxes, highlighting the need for alternative methods for the Government to raise money.

In January, Chancellor Jeremy Hunt responded to the Transport Committee, saying the Government was already working on ways to boost revenue alongside the rise of electric cars.

Don’t miss…
British expats told to take Spanish driving test or stay off roads [SHOCKING]
What to do if someone parks in front of your drive [IMPORTANT]
UK risks losing out as ‘global leader’ in electric car industry [WARNING]

He added: “As I set out at Autumn Statement 2022, it’s right that all motorists start to pay a fairer tax contribution. 

“That’s why, from 2025, electric cars, vans and motorcycles will pay Vehicle Excise Duty in the same way as petrol and diesel vehicles. 

“The Government is focused on delivering its core priorities, as set out in the 2019 manifesto. 

“As such, the Government does not currently have plans to consider road pricing.”

Get FREE MOT with Halfords Premium Motoring

£100 £4.99 a month View Deal

Halfords is offering an incredible deal where you can join the Premium Halfords Motoring Club and get FREE MOT from just £4.99 a month. With benefits worth over £100, don’t miss the chance to join now.

You can get also get a FREE membership when you join the Halfords Motoring Club, which includes a FREE 10 point car check, £10 off MOT and more. 

James Cartlidge MP, Exchequer Secretary to the Treasury, confirmed that the Government would continue to keep all tax policy under review.

He responded saying the Government does not have further views on the Committee’s recommendations for the ways in which road pricing should be considered.

The British Vehicle Rental and Leasing Association will continue to monitor the situation, adding that it is an issue that will have a fundamental impact on its members.

The association is pushing for immediate progress to be made and is engaging with decision-makers to ensure that fleet needs are considered in any solutions that are tabled.

There had been calls from some experts for the Government to announce any motoring taxation plans in the upcoming Budget this week.

Despite the announcements on road pricing, it was confirmed that the Government will address future policy on fuel duty in the upcoming Spring Statement.

As part of Rishi Sunak’s 2022 Spring Budget, the Government announced a temporary 12-month cut to duty on petrol and diesel of 5p per litre.

This was the largest cash-terms cut across all fuel duty rates at one, ever, and was just the second time in 20 years that main rates of petrol and diesel have been cut.

It represented a tax cut worth around £2.4billion in 2022-23 and helped millions of Britons save on their fuel bills.

Source: Read Full Article