The model for how we pay for our roads has been broken by the uptake of zero emissions electric vehicles. From 2030, the sale of brand-new internal combustion engine cars will be banned in the UK. That means the government has to start working out how to replace the money it makes from petrol and diesel cars.
Why does tax need to change?
At the moment the government raises around £35 billion a year from drivers. This is through the taxes we pay in fuel duty and VED (Vehicle Excise Duty or car tax). But this tax take will start diminishing rapidly as the number of zero emissions electric vehicles (EV) increases. That’s because EV owners currently pay no car tax and there is no fuel duty on electricity.
Why is this tax important?
A recent Parliamentary Committee report on road pricing revealed that motoring taxes will raise around 4 per cent of the overall tax receipts in the UK during 2021-22. Of the £35bn, only around a fifth of it goes back into roads. The remaining £28 billion that fuel duty raises goes towards paying for hospitals, schools and the armed forces.
How toll roads work
The UK currently has 23 toll roads. More often than not these are river crossings in the shape of bridges and tunnels. The money taken from drivers crossing these then goes towards paying for their build and covering their upkeep.
That’s fine but the vast majority of them raise £2 or less every time a car uses them. It’s certainly not sufficient money to replace the billions HM Treasury needs to reap as the number of EVs increases.
Fuel duty is “the perfect tax”
The Parliamentary Committee report described fuel duty as “almost the perfect tax”. Policy director for the Road Haulage Association, Duncan Buchanan explained: “The fuel duty system… is in itself reasonably transparent and reasonably fair. The more fuel you use and the heavier the vehicle, the more you pay.”
The government doesn’t want to build a habit
At the moment if you buy an EV, you offset the more expensive purchase price with cheaper running costs. This is encouraging the uptake of EVs but the government doesn’t want motorists to get in the habit of thinking owning an EV means not paying taxes for their motoring.
This could result in EV drivers taking their cars when they don’t have to and increased congestion. And of course every time a new EV is sold, that’s less revenue for the government.
The good news is motoring shouldn’t be pricier
One option the government could adopt would be a system that uses telematics – black boxes mounted in cars – to record the mileage drivers cover. This would then enable drivers to be taxed on the miles they drive, perhaps with wide ranging tariffs that are more expensive during rush hours in an effort to manage traffic flow more effectively.
The Parliamentary Committee concluded: “The government must set out a range of options to replace fuel duty and Vehicle Excise Duty. Those options should be revenue neutral and not cause drivers, as a whole, to pay more than they do currently.
“One of those options should be a road pricing mechanism that uses telematic technology to charge drivers according to the distance driven, factoring in vehicle type and congestion. If motoring taxation is linked to road usage, the Committee has not seen a viable alternative to a road pricing system based on telematics.”
When will this happen?
In July 2021, the Office for Budget Responsibility (OBR) forecast that by 2025-26, 4 per cent of the UK’s cars would be EVs; these would make up around one in six new cars (16 per cent) sold. However, in March 2022, EVs made up 16 per cent of new cars sold in the UK so uptake of battery cars is way ahead of the OBR’s forecast.
Despite this, the technology for road pricing is not in place and trials haven’t started yet so we’re still at least a few years away from any dramatic change in how we pay for our motoring.
make grown up cyclists pay a small tax fee drivers have to pay tax to use the highways why not cyclists they do not even have to have insurance as for electric cars why should they not pay tax aswell .do they not use the highways.
You have completely missed the point of the article… EV owners don’t pay, so no, not all car drivers pay…
Perhaps the same could be said for horses and horse and carts etc? Bicycles cause no pollution or wear and tear and aren’t usually used to go far. Paying for the pleasure of being abused and treated with total lack of contempt seems rather harsh.
I am in favour of paying per mile. I see this as the fairest way for government to collect revenue as an alternative to car tax or fuel duty.
Read the piece. Cars pay VED which is calculated on emissions. Drivers of EV don’t pay VED because their aren’t any emissions, the same as cyclists. Most of the country doesn’t have a pavement so do you think pedestrians should pay to use the highways? If you pay income tax you contribute to the upkeep of the highways.
Boom! And there is is.
Road tax is emissions based. EVs have zero emissions. Bicycles have zero emissions. Under the current system they can’t be taxed. By the way. I’m a motorist paying road tax and a cyclist…..why should I pay to use my bike?
Totally agree, the law has changed in support of cyclists and they still flaunt the law and pay nothing towards the upkeep,
And anyone that uses pavements as well, they should all pay for their upkeep.
The usual crap rhetoric re. the cyclists! It’s about emissions!!! Get your facts right before you attack the cyclists!!
I think any vehicle, 2 wheels or more should have to be insured. If a cyclist causes an accident and the car is damaged then the driver has to pay.
Most cyclists are car drivers too so contribute towards road costs through the car tax they pay. Also most cyclists use cycle lanes where available not the highway.
Totally agree with dj, cyclists are having more rights of way yet, no road tax to pay for additional painting to roads for “cycle lanes” that just dissappear, also going through red lights… can I do that please. Ridiculous.
Totally agree with dj, cyclists are having more rights of way yet, no road tax to pay for additional painting to roads for “cycle lanes” that just dissappear, also going through red lights… can I do that please. Ridiculous.
Road tax is tax for using the road it should be a much fairer system and every car road user should pay the same amount of tax, it is still the same for wheels on the road it should not be governed by the cost of a car, it makes no sense to charge a high amount of road tax for the first five years of a car and then reduce it, it’s still the same fore wheels on the road. The cost should be the same for every car and a more sensible amount, the government has messed about with car tax for too long giving sweeteners to some car users then changing the goal posts to suit their revenue when they realise they got it wrong. How can someone with a 2014 large diesel car pay 30.00 road tax and someone purchasing a hybrid pay 545.00. The same four wheels are using the road
I agree.
Cyclists are generally fitter and healthier people and are less of a burden on the NHS. They also create zero emissions and congestion. What’s your problem?
I do like the pay tax per miles you drive as this would be fair to every driver but then the argument comes into play ref lorries delivering goods as they would be crucified with extra costs so that would need consideration. I don’t want to see additional taxes being introduced either it would need to be a 1 off tax for all and not a lot of piecemeal additional extras such as -road tax , highway charges, pay as you go , fuel tax etc as everyone then doesn’t know what they are actually paying.
If we went down a fuel cost which was all inclusive surely this could even take in the insurance costs as well and then if a car was stolen and had an accident then an uninsured driver is actually fully covered and costs still could be paid out of the central pot.
This tax also takes into account the actually amount of mileage any car covers and nobody would ever have to renew their tax disc- full cover all around.
All car users should pay a set tax to cover the costs of maintaining the road system based on the size or weight of the vehicle. If you have a vehicle you pay the tax. We should not make the system complicated by using technology which only increases the cost of collection. Remember the Poll Tax fiasco. Just a thought.
Why on earth should EVs be exempted from road tax? Do they not use the roads? Just looks to me like a nice tax break for the wealthy.
My assumption is people will divert off motorways if there is a toll to pay meaning A and B roads will become more congested, likewise more traffic in towns and cities.
with regard to electric vehicles why are they not contributing to the upkeep of motorways and roads.
cyclists should be covered by insurance, adult cyclists kept off footpaths and be made more responsible for their actions on the road
If you pay by the mile, is that not unfair on more remote areas? I live 16 miles from my nearest petrol station (with very high prices) 19 miles from my nearest supermarket, 31 from my local hospital, and there are others further away than this.
If the problems in cities with air pollution etc can be reduced by encouraging public transport, (and there is plenty of public transport in cities), should it not be those in the cities who make the effort to reduce that pollution?
i can solve the problem straight away tax electric vehicles to the hilt and get rid of them stop the ban o fuel powered vehicles and let the manufactureres continue to improve emissions and have a straight single tarif road tax that is spent on the roads and stop any thought of 100 million pounds funding for driverless vehicles it stupid
I agree wholeheartedly. If you use the roads you should pay road tax. They used to in Jersey C I, and the bikes had registration plates. Not sure if they still do.
Cyclists should pay tax and insurance to use highway roads (particularly the cyclists that do not use cycle tracks that have been provided at great cost to all tax payers, even non cyclists or car users). Motorists also have to endure 20 mph speed limits to provide safety for cyclists, even in areas where expensive cycle tracks have been provided.
Electric cars should not be exempt from paying road fund taxes, at the expense of diesel and petrol car users (or a loss of revenue to the government). The road fund tax is not a green tax, it is supposed to be used for maintaining roads and motorways. Motorists using Petrol or Diesel cars already pay a green tax on the fuel they buy. Why not make the electric car motorists pay a green tax when charging their cars ( generation of electric is not necessarily green).
I for one agree , Cyclists should pay to have use of the roads just like vehicles , motor cycles have to , Each cycle could be given a coding number that would be registered to its owner just like a vehicle then they could be given a pass or card to show that a fee had been paid , I think also they should have liability insurance so claims could be made if in an accident occurred, by the way I myself use a bicycle !
Taxing cyclists would put people off the one really viable alternative to car travel in this country. That would be counter productive if reducing the number of cars on the road is an aim. Being taxed on the number of miles driven seems fairer to me. I am an EV driver, and I would be happy to pay a fair amount on my mileage.
as well as driving a car i also ride a bike for pleasure and i have a fully comprehensive insurance plus recovery if i had to pay a tax to use the roads and cycle tracks then i would do so.
Vehicles from other countries do not currently contribute to UK roads. Switzerland does, or used to, run a vignette system where you paid for a windscreen sticker (valid for 12 months). We could run a similar system here, it shouldn’t be too expensive to discourage visitors; perhaps around the £30.00 mark for cars and more for larger vehicles. This might help.
I genuinely hate electric cars and despise the people who drive them. Thank goodness I’m 68 and will be dead by the time they really take over…if indeed they ever do…I’ll worry about it then
Agree but would suggest that all people who use the highways should contribute towards the upkeep of the road systems, including caravans trailers etc as they all contribute to the general wear and tear of system. Also with Health and Safety in mind all users of the highways should be subject to MOT requirements and public liability insurance particularly cyclists, and,mobility scooter users. Come to that some sort of test and licence should also be a standard requirement for the above mentioned and anyone who tows caravans ,trailers etc. Just a thought!!!!!
‘by 2025-26, 4 per cent of the UK’s cars would be EVs; these would make up around one in six new cars (16 per cent) sold. However, in March 2022, EVs made up 16 per cent of new cars sold in the UK so uptake of battery cars is way ahead of the OBR’s forecast.’
Only in percentage terms. The numbers of new registrations in July 21 and July 22 were significantly down on previous years so overall we’re not all on our way to EV’s. Unless the prices and charging times reduce substantially, and ranges increase dramatically, many will stick to petrol or diesel until such time as the draconian Tory and SNP regimes send everyone but the richest back onto horseback!
Easy solution is to tax electric cars , they use the roads out the same as any vehicle.
I couldn’t agree with D J Deeley more. What seems to be a lot of money is being spent on Cycle lines which are rarely used and reduces the width of the road. A lot of the so called Cycle Riders use the foot paths anyway. Stop them riding on foot paths and make them pay.
Not everyone can buy and use an EV as they do not have anywhere to charge it. Flat users can not access charging points unless they go in the street and hang around. So what do we do?
given the enormous cost of electric cars and replacement batteries, I think its only the rich Tories that will be driving in the future.
That is a good idea, but the problem is that all bikes would have to have a registration number allotted to that bike the same as motorcycle are at present
Cyclists are not damaging the environment, increasing health problems such as asthma and cancer and making congestion on our roads worse, so why should they pay road tax?
cyclist are given there own lanes and still pay nothing how is that fair
Whatever they do please do not put in tolls everywhere, causing hold upos everywhere you travel. Easier to add it to fuel/electric charges. Those who use the road more pay more.
Many people like myself, live in a block of flats and cannot install a charging point. How are we supposed to charge an EV?
I’m am and 79 and have started cycling again after 50 years. I have made new friends and out in fresh air and exercise and saving on diesel and good for my metal health. I cycle mainly on cycle paths but one always has to ride on main roads at some time. To pay tax would reduce people bothering to cycle.
Instead of trying to use a complicated electronic tracking system, which we all know will be expensive and won’t work, simply get all cars, petrol or electric, to pay a road tax.
I agree with D J Deeley, cyclists should be made to contribute, especially as they now have more say on the roads than motorists, I have discussed this matter with my MP and suggested that they should certainly have insurance, but to no avail. It would appear that the government as usual put the cart before the horse!!
Cyclists need number plates to identify them when they break the rules, as they frequently do in South Wales.
If you think the government will give us `Revenue Neutral` you are being naive. How could they possibly know what the current balance of different mileages and congestion time usage is in order to set the tariffs?
Not a hope in hell. It will cost the average driver more. Name any government policy that does not result in more taxes. Totally unrealistic. Also, and more worryingly, this is a serious Big Brother move – the government will be able to use the telematics to know every journey you take, all your various destinations, your complete timetable and, of course, your speed. We all break the speed limit either occasionally or regularly, depending on driving conditions in most cases – we will all be banned from driving in just a few weeks! Telematics is an absurd and intrusive idea. If it is to be fair then the tariff should be based on annual MOT mileage records. Modern cars are basically impossible to `clock` so this would be a fair, simple and proportionate taxing system based on road usage requiring no further technology or set-up costs but without any intrusion on civil liberties.
The very fact that the government is considering telematics is transparently absurd. Why, for instance should people pay more during congestion times? These are people who, in the main, have no choice but to travel for work during these periods. It doesn`t reflect their ability to pay – they will be paying more tax because they have to work. Ridiculous.
People must stand up to government on this one – it is a serious intrusion on privacy to use telematics and it will also result in all the aforementioned problems. Who in their right mind would think this is sensible? It is not. It is government getting yet more control of our lives. Successive governments have proved their inability to deliver fair and equitable taxation and freedoms and this will be more of the same but on a much larger scale.
Make it possible to scan a vehicles mileage. An app calculates the tax due. DVLA is provided with scanned details, with vehicle id and payment, and overdue payments are flagged.
Electric vehicles are not carbon neutral as long as power stations burn fossil fuels, although it is a much less polluting system than an internal combustion engine.
I agree that cyclists should be taxed for using the roads or better still get them off the roads altogether, they are a hazard to everyone, there’s no room on today’s roads for push bikes.
In rural Scotland we have no choice but to travel very long distances for supplies of anything. There is no public transport and very few local services. The roads, even major routes are little more than single track potholed tracks, heavily used & prone to extreme weathering all year round. People have 4×4 vehicles because an ordinary car is unsuitable and delivery vehicles too large for theses tracks. Living here is going to be unsustainable without cheap electricity. We couldn’t afford to buy or run an ev.
EV’s are not the answer and never will be. Bad planning, selfish attitudes and poor long view planning by governments have created a society that now needs a car to do almost everything. We need a fundamental rethink about how we all live.
Impose a cycle and horse road tax. the number of cycle lanes being built is rediculous especially as it reduces the amount spent on roads proper. The problem is the cycle lane only goes so far along the road. Tax them
Payment per mile regardless of what the vehicle is and when it is used seems fair. As electric vehicles are nearly twice as expensive as petrol and diesel ones what does the government do with almost double VAT they receive, surely that must offset 10 year’s road fund license.
There’s not just EV Cars, some buses,coach’s, vans and trucks are also electric. They also contribute to the Pothole holes. Why should they get away with not paying road tax. They are no lighter than combustion vehicles.
Cyclists should pay a road tax and must be insured, the tax could be included with the insurance. Remember cyclists cause accidents as well.
The other way to raise funds would be to tax all vehicles according to size and weight which come over to the UK from abroad. Remember they are contributing to the wear and tear on our roads.They come over here using fuel purchased before arriving, thus avoiding to pay any tax to use our roads.
I agree with the comment about cyclists. Currently pedal cyclists do not pay a penny towards the roads they use, they do not have to have insurance, in lots of cases their bikes are not mechanically fit to be on a p7blic road and they do not have to pass any test to prove understanding of the Highway Code. Yet they get special cycle lanes, areas at the front of traffic lights and scream when any of their so called freedoms is challenged.
I respect motor cyclists as they pay their way (for the most part but I will not respect, or give way, to pedal cyclists unit I see pedal cycles with some sort of displayed licence and all cyclists have to have passed a test and have insurance.
I haven’t read all of the comments so do not know if anyone has made the point that black boxes to record mileage in vehicles is likely to be costly and and another ‘pain’ for motorists, no matter what size is their vehicle. All vehicles after a period have to go for MOT’s and that records their mileage. Easy option! All vehicles form the date that they take to the highway have to visit an MOT station for the mileage recording to be taken every year and pay according to use and type of vehicle. For cyclists, just a small fee each year regardless of use.