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Car Tax Has Changed, But It Hasn’t Gone Far Enough

Car Tax has changed, with smaller, more economical cars actually being hit the hardest. Some poor motorists may be paying up to nine times more than they would have under the old system.

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.

As someone who drives 5000 miles a year in an old car with a large diesel engine, I would welcome the cost being put on to fuel. By driving in a moderate non-aggressive manner, I achieve a fairly low fuel consumption (lower than the tax system thinks). Tax based on Fuel consumption is fair because it takes into account how much wear you put on the roads and how much pollution you cause (and how aggressively you drive). However, parked cars occupy space and cause congestion, so a fixed equal charge should also be levied on all vehicles, to cover use of the roads to park and the cost of registration . But you say, "I park on my drive"; Yes, but when you use your car, you stop somewhere some of the time, so you should still pay the fixed cost.

If fuel were reduced to 77p per litre all that you'd achieve would be a rapid growth in the number of huge SUVs on the roads.

The only fairway is based on usage. The mileage reading is not a good one. Doesn't allow for overseas travel or off road driving. Not to mention winding back (doesn't ever happen of course!). At the moment an extra cost on fuel seems the right way, heavy users pay the most. Helps those with hybrids and electrics or those who do few miles, so environmentally sound.

The assumption that somebody who just pootles down to the shops is less polluting seems flawed to me. In short runs, the engine doesn't have change to warm up, is running on a richer mixture for proportionally longer (via the choke or the engine management system) and will, therefore be polluting more per miles driven

How many foreign vehicle owners that have lived here continuously for years pay UK road tax on their 'European' vehicles?

The simplest and most effective method is to put the tax on fuel. It keeps the greenies happy, charges based on mileage, and is (nearly) impossible to dodge. Assuming an average of 10k miles and 45mpg, you would need to put about 12p/l on fuel, and that excludes the cost savings from not having to collect/monitor/administer VED anymore.

What you say is true but somebody who just pootles to the shops usually cover only a few hundred miles each year and so while the emissions from a cold engine are greater per mile the total emissions per year are still much less than a fairly modern car covering only half the average mileage. As time moves on many more of the pootling type cars will have maniCATS and heated oxygen sensors so will be under full emission control very quickly so except in the coldest weather the emissions per mile will be on a par with the non-pootling type.

The Road Tax system is now an unfair cobbled together system designed to manipulate markets while attempting to appease the lobbyists who shout the loudest. It is probably the unfairest and most discriminating of all the taxes, something that is unlikely ever to be fixed until it is possible to elect a fair government. If the movement in support of electoral reform successfully manages to persuade Parliament to bring Proportional Representation to these shores there hopefully will be some changes to a fairer system. Those who would like to see some changes to a fairer way of doing things should throw their weight behind the PR campaign.

it used to be on the fuel (and still is) then the government decided they were short of cash and the VED as we know it (and the original tax discs) were launched. somehow I don't see them going back to the 'old' way of taxing JUST the fuel. after all, they realised insurance was a legal requirement for a car, so now slap a tax (12% I believe) on that as WELL.

A reasonable admin fee, to cover registration costs etc, and the bulk of the cost onto fuel. Those that pollute, pay most. Only fair way