UK Road Tax on EVs coming?

[Dabz]

https://www.ft.com/content/405467f9-c3cd-4b4d-bc48-2582890e7820

It was always inevitable

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[Midlifecrisis]

I can only see the headline there. I wonder if they will try to make it retrospective or only for new cars from April. Incentive to keep the current car!

 

[Dabz]

It let me read the article at first but now it’s behind a paywall. Doesn’t give much info other than Jeremy Hunt is planning to introduce VED on EVs from 2024 so at this stage it’s all speculation when it comes to cost etc

from another site:

Drivers who have switched to electric cars and vans in a bid to be greener or to avoid paying for fuel may soon have to pay taxes under a new Government plan, according to reports. The move could be announced by Chancellor Jeremy Hunt in his Autumn Statement within days.

A Whitehall source told the Telegraph it was now inevitable that electric vehicles would be taxed at some point - and it is believed electric vehicle owners may have to start paying Vehicle Excise Duty like everyone else in 2025.

 

[tigerbalm]

FT article attached.

 

[Levee]

I doubt this government will be around by April 2025 so we wait to see what happens.

I don't totally agree that the HMRC are losing money on EVs, the larger upfront price drives up VAT revenues. The loss on fuel duties may ultimately be more sensibly replaced by road levies and congestion charges.

It's a long old way away and I suspect Labour will be rewriting the rulebook before then... (doubt they'll be helping Taycan owners though!!).

 

[Fish Fingers]

It was always on the cards.

I have assumed the current time as being a window of opportunity before the inevitable tax on EVs.

No idea what they will come up with, compared to emission based tax on Ice cars?

I suppose they could do many things.... a flat charge? .... base it on battery size? ..... put tax on charging stations (like ice)?...... change the company tax breaks?

Anyway, we have got a few more years before we need to worry about it.

More pressing concern (for me) will be the expected increase in Dividend tax / CGT and Corporation Tax increases.

 

[Dabz]

agree with all the above. It would make sense to somehow tax on mileage which is what fuel duty does, but not sure how they’d do that without penalising those who can charge at home.

the corporation tax increase makes buying the Taycan in cash even more attractive, provided they keep the 100% first year allowance. CGT is going to hurt, as is dividend tax.

labour seem to have more eyes on the green agenda but as other posters have said, who knows what’ll happen. Rishi is recovering in the polls so people seem to have very short memories

 

[WuffvonTrips]

I guess the expectation is that most people who can afford a new EV aren't going to find Road Tax becoming a significant factor in its affordability.

 

[f1eng]

There isn't much consistency or logic in the vehicle excise charge anyway. My first plug in hybrid, which has a 12 mile electric range but needs the engine running to have a heater has a zero rating.
On finding a lot of plug in hybrids were being bought for tax benefit rather than emissions the rate was changed to £90 so my more recent car, electric range 35 miles and heat pump for the car heater which has hugely lower emissions.
My Merc 500E has such a high excise duty I leave it on SORN a lot because I don't need to use it much.
Actually the only logical charge is added fuel duty such that those that use the most and pollute the most and wear the roads the most pay the most.
Sadly political activism knocked that on the head when it was tried so as we get more and more EVs if revenue for roads comes from the people using them we must have toll roads and congestion charges. This is the only fair and reasonable way of funding roads I know of.

 

[Fish Fingers]

I think UK Govts don't overthink these things.....
If they can get away with taxing something without uproar (losing votes) from the public they consider it fair game.
Whatever it is.
And then the money just gets lumped in with everything else at the treasury.

I can eventually see it being charged per mile for all vehicles using satnav/black box tech.

Different scales for different vehicle classes.

 

[f1eng]

all vehicles using satnav/black box tech.

Excellent for classic car enthusiasts!

 

[Dabz]

Im not a fan of black boxes and surveillance. My current insurance black box logged me as 96mpg yesterday on the M5 over a stretch where I was lucky to be hitting double figures for an hour. 96mpg...if only

More than the standard VED it'll be the new car surcharge. I currently pay a fortune for a relatively low emission petrol engine because the car was over 40k. It makes the first few years of ownership expensive

 

[f1eng]

Im not a fan of black boxes and surveillance. My current insurance black box logged me as 96mpg yesterday on the M5 over a stretch where I was lucky to be hitting double figures for an hour. 96mpg...if only

More than the standard VED it'll be the new car surcharge. I currently pay a fortune for a relatively low emission petrol engine because the car was over 40k. It makes the first few years of ownership expensive

Yes it is illogical.
IMO the payment should be primarily linked to road use which means the only fair method is fuel levy but that was unpopular with politically influential groups, however fair it was and didn’t last long.
I suppose expecting logic or even fact to have much weight in policy is naive.

 

[Murph7355]

Yes it is illogical.
IMO the payment should be primarily linked to road use which means the only fair method is fuel levy but that was unpopular with politically influential groups, however fair it was and didn’t last long.
I suppose expecting logic or even fact to have much weight in policy is naive.

VED isn't there to pay for the roads etc. Like every tax now, it's simply there to pour into the black hole that is government expenditure.

I'd much, much prefer a taxation system where the taxes were more direct like this. It might make people wake up to the actual costs of the services they receive. But that boat sailed decades ago.

 

[gusone]

Any increase in BiK is more concerning. When it hits 10-12% company car salary sacrifice ceases to be tax efficient for me and a cost.

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