Hopefully, you should all be aware that since April 1st this year Vehicle Excise Duty, or VED as it’s known, changed quite dramatically. A big price hike was seen across the board, with first-year rates going up significantly. After that initial hit, a flat rate of £140 applies every year.
Hybrid’s get a £10 discount. Generous.
You’ll also pay a £310 charge for five years on cars costing £40,000 or more. But in reality, smaller, more economical models have been hit the hardest, with some motorists being clobbered in tax by nine times the price of the old system.
But in reality, smaller, more economical cars are hit the hardest, with some motorists being clobbered in tax by nine times the price of the old system
All of this only applies to cars registered after April 1st 2017. Anything before that stays as it is. Surely the whole system needs an overhaul though?
Seeing as diminutive, frugal, less polluting hatchbacks and even hybrids are now being taxed at an extortionate rate, shouldn’t it be based on the miles you’ve driven?
If my Mother pootles the four-mile round trip to the local shops and back, in deepest darkest Lincolnshire once a week; should she really be paying the same amount of tax as a sales rep who is constantly battering the motorways day after day?
It just seems a little unfair. After all, you’re not charged a flat rate of £2,000 a year for your electricity, no matter the size of house or usage. The same can be argued of any utility, maybe with the exception of broadband these days.
Even then, if we take the broadband analogy and fit it to the motorist it would still work out better. You could have different brackets depending on the distance travelled. So 0 – 4,000 miles a year pays £50, no matter the car. 4,000 to 10,000 would be £120, from there on up prices would jump considerably.
Yes, businesses would be hit harder. Especially ones that run fleets, but there could be a tax offset system or a slight subsidy for smaller businesses to help them out.
As for tracking the mileage, the simplest way would be to do so with every MOT. The mileage is registered and recorded every year. Once the number has been entered by that independent, third-party you’d simply get the bill emailed to you from the DVLA.
If you’re buying and selling there could be an issue. You’d either have to pay the balance of the mileage when it comes to the point of sale, or the next owner would negotiate a discount with the seller.
There is, however, a problem with this method, that being the MOT exemption for the first three years on all new cars. This would either have to be abolished or a hefty fee paid upfront at the time of purchase.
Another way would be to add it onto the price of fuel. In fact, this would be a damn sight easier than the above method.
However, we’re already overcharged for petrol and diesel in this country as it is, I can’t see anyone else being in favour of adding to that.
The only way it may work is if the government were to cut its tax percentage on each litre. Currently, that sits at a massive 65%, meaning they’re making 77p on every £1.19 litre of petrol. Just imagine how affordable motoring would be if we paid 77p per litre…we can but only dream.
Back to the case in point. The government would have to split their tax levy in half, with 32.5% being taken in fuel duty and the other 32.5% in road tax. Realistically we can’t see them being willing to do that, even though the motorist is already squeezed with eyeballs bulging when it comes to taxation.
Maybe it’s time to look further afield for a tax solution. The American way, in which an annual registration fee is looked after by each state may work. Taxing on the vehicles current value is another really good idea, it means older cars are taxed less so it doesn’t hit the less well off as hard.
So until a newer, more modern system is figured out, one that hopefully doesn’t include ‘big brother’ telematics; the standard broad stroke approach will be used for taxing the ever poorer motorist.