Pay per mile car tax discussions
We have seen a lot of discussion over Goverment intention to bring in a pay per mile car tax. If introduced how would it affect members of the club ?. Will reduce the use of motorhomes and touring caravans .
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Sorry but how can we possibly guess. No firm details are known and any reduced usage of vehicles will depend on the rate charged. Do you know something we don’t?😀
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I thought we already had one, called the tax on petrol and diesel? I find the more miles I do the more I have to refill and pay more tax. And when towing I have to that more often.
Unless you just put £20 in each time like Trigger
As TW says it's impossible to say but I would assume there would be a corresponding decrease in fuel or other taxes? So it might balance out.
Perosnally I imagine I would do the same mileage caravaning as I do now, I've retired and I want to go away.
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Road Pricing is not a new idea, it was around about 20 years ago. The difference now is that with an increasing number of Electric Vehicles and that number growing each year at some point in the future taxes raised by petrol and diesel will gradually reduce. I imagine fuel excise duty/tax is a major contributor to the exchequer and as that reduces it will have to be replaced by something else. Given that we have the technology Road Pricing would be the obvious replacement? How acceptable it is will depend on how it is delivered. Will it be a flat rate for every journey regardless of time of day of will it be more nuanced by charging more for different roads, different times of day. If it was a national system we could get rid of all the separate charging for various ULEZ zones? Thinking back to when I used to tow and more recently when I had a motorhome I can't see that it would bother me too much as even when we did our long trips abroad our annual mileage was quite modest, much lower now. I suspect the acceptance of the idea will depend very much on how its sold to the public. If the Government is clever, not a trait many Governments have, they will sell the benefits. If its a straight quid pro quo, ie, roughly equal to what we pay now, then what is not to like about it? The other side of that coin is if more money is raised than under the old system. I would would encourage people to be open minded about the idea of Road Pricing before throwing their arms up in the air in horror?
David
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I tend to agree with most of what you say David. Practicalities need to be thought about for gov's point of view.
Technology already exists with some car insurance companies having boxes in cars to monitor mileage done in order to ensure the mileage declared as annual on buying the insurance is adhered to. This is mainly for young drivers to try too keep costs down. Don't know how or if this would apply to the general road using public or even how they would go about charging/monitoring usage.
Whichever system in use I don't expect to gain financially from it!
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This makes perfect sense to me, although I can't see how practical it will be to implement. Will there be a huge increase in cameras tracking our every movement, or will we be required to have trackers in our cars?
Will there be a requirement to have mileage independently checked each year, or will Government predict our mileage each year, send us a bill and then invite us to challenge?
What about people who spend a high percentage of their mileage on the Continent?
Whatever is considered, its potentially open to abuse and mistakes in my opinion
I take Corners point about fuel tax, but presumably this would be introduced to replace road tax, and is being considered with the increasing usage of EV's in mind.
We're in the same boat as Rufs in that we have a second car that does around 2K per year
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I’ve heard nothing (lately) about this, although the idea has been mooted before. On the face of it, it sounds quite fair, pay as you go, although it won’t be quite that straightforward, it never is. I’d guess if it was brought in, we would see fewer cars on the road especially during rush-hour (more car sharing?). I’m sure one selling point will be a cut in pollution, but I can’t see the government coffers taking a hit, quite the opposite I suspect. I’m guessing that government income is starting to feel the effects of more and more EV’s on the road, so sooner or later it will have to be addressed, I think.
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Back of the envelope maths. If you have a car that does 45mpg, and you drive 10k miles a year, you will consume about 1000 litres of fuel a year. From memory, duty + take on duty is about 60p per litre? Thats about £600 per year in duty. So to replace that you need to charge about 6p per mile.
The government wont want to add a lower weighting for less efficient cars, as they will need the revenue replacement for EVs - the cleanest cars of all. More likely, if there is some weighting it could be based on weight (GVW or GTW), or simply number of axles (think M6 toll).
@Freddy55 - I cant see this making a huge difference at rush hour - the incentive to reduce cost through lift share is already there (you save the fuel). Road pricing is only going to replace the VAT and duty, but by car sharing you save the entire fuel costs.
So if (when) it comes in, my expectation is it will be flat per car (or per car category), levied on top of fuel duty and levied on top of VED. Just possibly it could replace VED, by adding an extra 2p per mile giving £160 per year for the average mileage of 8K miles per year?
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“@Freddy55 - I cant see this making a huge difference at rush hour - the incentive to reduce cost through lift share is already there (you save the fuel). Road pricing is only going to replace the VAT and duty, but by car sharing you save the entire fuel costs.”
Yes, you could be right. I always think that if you pay per unit (mile), it sharpens the mind, even if the result is the same overall.
My assumption is/was that this kind of pricing would replace VED, who knows…1 -
Until they tell us we don't know how the system will work. However looking at our neighbour across the Channel they have thousands of miles of pay motorway. Many people will have a Tag fitted in their windscreen which communicates with overhead sensors (not cameras) and you get a bill monthly. Probably the bill bit would be the strangest bit to get used to. Alternatively they might go with GPS trackers as then there would be no need for overhead sensors. If the Government pitch the charges to be as near as possible what people currently pay for fuel, thanks CT for the calculation the only real difference will be the method of payment?
David
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Agree with that, and taking my point further.
I realise price per mile will replace some form of other tax but at the moment if I tow I pay more fuel duty since the mpg drops significantly compared to when solo. But if it's a simple price per mile then it will be cheaper for me when I'm towing? I'll use more fuel but if it's a simple price per mile that price 'won't know' I'm towing and using more fuel or of course more battery.
So I assume there will be an increased charge if people tow? Of course there might be price bands depending upon your car's weight?
And like you say how do I let whoever, whatever, is in charge (pun intended) know I'm towing so incur the increased price? Might be open to abuse, not by any club member of course
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I agree - the sharpening of mind does happen when your credit card is out. It's incredible how desensitised people (we) have all become to the costs of filling a tank with fuel, and then using it up "because it's there".
Again - I agree, road payments may well displace VED. Perhaps HMRC will keep a smaller flat rate for all cars - kind of the "starter for 10", forcing registration of the car and maintaining the ability for tow-away if it's not taxed?
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The method for payment will be (now I think about it) key to the aim of the policy. If the aim is to simply raise revenue, then making the payment as separate from the act of driving as possible will be key. DK - as you say a bill linked to a tag that is scanned as you pass major road intersections, added up in the background and issued as a direct debit or credit card charge makes the payment totally isolated from the act of driving.
Of course - this needs huge infrastructure and adoption to both measure use, and identify "non payers". The French have been doing this with Payage for as long as I can remember, but it's built into the road system.
If the aim is different, to reduce journeys and congestion, you want the payment scheme to be "in your face" and directly correlated to each journey you make. Either through a series of toll booths (pay as you go), or via some display in your car (phone app, built in car app, separate box) that shows your current cost for the journey and links to some pre-pay or pay at the end of the day scheme.
I do think its interesting to the think about these things, the implication of the models that may be chosen, and how the practicalities will add up.
I have been wondering for some time how adding road pricing will work, but it now seems to me that there could be model that insists on some device being registered along with your VED payment, and is verified, perhaps with the MOT, as being in-place and un-tampered with. could result in a mileage record tied to the car.
It also seems that there is a big difference between _all_ road pricing and _trunk_ road pricing. A difficult sliding scale that could create a two tier system (bad) pushing low cost journeys to B roads...
There are HUGE issues with privacy and GDPR, but maybe this is a way forward.
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Wouldn't the easiest way forward be to put the road tax totally onto the fuel used or the metered electricity used. The more you use, the more you pay. No extra cameras needed, or chasing for payment. Costs taken at point of sale.
Colin.
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Colin
The trouble with that is how are you going to charge people with EV's? I think 30/40 years ago that might have worked but as we move into the non ICE era its not really practical any longer. It would be difficult to tax electricity used to charge EV's as many will charge at home and I doubt it would be easy to have a two tier system for home users. OK easy enough for public chargers but if that method was employed people would just make sure they charged at home and only use public chargers in an emergency? If or when it comes it will be a massive change.
David
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Thats is what is in use today, but it's not going to work for EV. Sure you can add duty to electricity consumed at a public EV point, but realistically, it only addresses perhaps 10% (maybe as little as 5%) of the electricity consumed by EVs. At best it misses the ability to collect the duty, and at worst, it is just going to kill public charging, and eventually EV adoption, because it's basically impossible to add duty to home charging. There are already hundreds of thousands of home charge points that have no constraint on how they "charge" for electricity, and never will have.
I also cant quite see how you would add it. The aim would be to charge all drivers in more or less the same way for miles driven, without damaging the uptake of EV.
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I don't quite see the object of taxing per mile. Why not drop vehicle tax altogether and increase the tax on fuel or introduce a tax on electricity for charging electric vehicles instead? No need for any additional infrastructure, no need for any black boxes. What's the point?
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Taxing EV "fuel" is almost impossible. 90% - 95% is carried out at home where there is no possibility of either tracking or enforcing the tax point.
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...introduce a tax on electricity for charging electric vehicles instead...
You mean on charging points solely used for charging EVs? Yes maybe.
But being based abroad I'm not sure you know that we already have a tax on electricity at home so that could be increased but of course not fair to those not having an EV.
So somehow the electricity used only for charging for this tax to be applied to would have to be noted by some sort of technology involving the charger and or meter? Wouldn't that mean new costs in either changing everyone's meter or charger or adapting them?
A quick search says there are 400,000 chargers in domestic houses/workplaces and 32 million domestic meters.
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It might be possible for energy companies to differentiate between electricity used for domestic purposes and that used for charging EVs if a smart meter/smart charger are in use. We have a dumb meter and dumb charger - the smart stuff simply doesn’t work properly in this area. Therefore, I can see no way an energy company could levy a tax on behalf of the Govt on an unknown proportion of our electricity used for charging an EV. 🤷🏻♂️
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Even with a smart meter, there is no way of differentiation electricity used to run appliances vs that for charging an EV. The device supplying the car would need to be smart and be the measurement point, as CS points out there are hundreds of thousands, if not millions of devices already deployed. The barn door is open, and that horse has long left the stable.
Besides, one of the values of an EV is you can charge it anywhere the is a regular AC outlet. With a granny lead, I can plug into any supply that can deliver a continuous 1.3kW and charge my car. That would include a totally off grid solar + battery array, with very little effort. How do you charge someone for electricity that is free? I accept you could retrofit legislation to force all EV chargers to be duty charge points, but it's pretty much unenforceable.
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Interesting read Freddy. If they are correct in their suggestion of 2p a kilometre it would only cost me about £60 a year, which is a lot less than the £185 I pay now. That also assumes that all roads would be included in the charging model. I think you would have to be a pretty high mileage driver to pay more than road tax. Obviously that doesn't apply to EV's currently but they would pay more.
David
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Hiya David.
At 2p per kilometre, my annual cost would be around £320, based on 10,000 miles a year* I currently pay around £200 VED, so it would be more expensive. I’m ok with that.
* 10,000 is probably the most I’ve travelled in one year.
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I must be missing something. Why cannot you have a separate meter on the home charger?
Colin
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Would that not mean having two incoming supplies or maybe a three phase supply? Who is going to enforce the separate installation and pay for it?
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How do you install a separate meter on every possible 3 pin socket in the house? Or between the dedicated feed to the charger and its associated junction point. And what do you do for locations where smart metering is not possible? And how do you build legislation to have a government owned element deployed in a private home?
Part of the problem for the government here is that electricity is so flexible as a source, and so ubiquitous in nature, it’s almost impossible to legislate around.
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