Diesel Vehicles

[Heidfirst]

Not always a fan of Auto Express but this chimes with me http://www.autoexpress.co.uk/car-news/100301/petrol-and-diesel-ban-exposes-gaping-holes-in-the-government-s-understanding

I have a sneaking suspicion that eventually we will all  (electrics, hybrids & hydrogen too) end up paying "road tax" by the mile in some shape or form  - the government can't afford to lose the income if we all end up driving vehicles that are tax exempt due to low/ultra low emissions.

[IanML]

That AutoExpress journalist makes sweeping assertions without citing any research to back his statements.  And his point that hybrids are not affected by the 2040 proposal is probably intended, not an oversight.  To encourage the switch and phasing out of hybrids, all that is necessary is to gradually increase taxes on petrol & diesel.

It would be relatively easy for tax to be levied on hydrogen fill-up and fast-charge stations, but much harder to tax overnight-charge-at-home, and such taxes would counter the encouragement to phase out fossil-fuelled transport.  It may be more sensible and fair to increase general taxation to compensate for the dwindling revenue.

[FROSTYBALLS]

There were also the following articles - 

https://www.autocar.co.uk/car-news/industry/hybrids-exempt-britains-petrol-and-diesel-car-ban

[Heidfirst]

7 hours ago, IanML said:

  And his point that hybrids are not affected by the 2040 proposal is probably intended, not an oversight.

I don't see why you would have thought it is an oversight (especially as it is made twice in slightly different format)?

The government can't afford to lose "road tax" without finding a replacement of some kind - it's too large a proportion of total revenue. Increasing general taxation levels as a replacement would be unfair on the large % of (voting) people who don't own/use a car so I can't see that being a starter.

[IanML]

I didn't think it was an oversight - the writer of the article implied that it was.

All fuel duty (including heating oil) amounts to only 1.4% of national income for 2016-17. Not insignificant, but small enough to be worked around with other tax changes.  And no-one ever lost votes for NOT taxing something.

[Heidfirst]

1 hour ago, IanML said:

I didn't think it was an oversight - the writer of the article implied that it was.

All fuel duty (including heating oil) amounts to only 1.4% of national income for 2016-17. Not insignificant, but small enough to be worked around with other tax changes.  And no-one ever lost votes for NOT taxing something.

Sorry, but you are obviously seeing or reading into the article something that I am not. 

Motoring related taxes incl. Road Fund Licence & fuel taxes are reckoned to be ~7% of total taxation. If, as you suggested, you apply an increase to general taxation to replace RFL & fuel duty then all those who don't drive but would see their taxes rise as a result would, most probably, vote against it.

[IanML]

I agree that 7% would be too much, but I did say Fuel Duty, not all motoring taxes (incl RFL, or VED, to give it its correct name) and that is 1.4% of national income - it may be a higher proportion of taxation, but nowhere near 7%.  If it were done just after a General Election, the public would have plenty of time to get used to it 

[Heidfirst]

National income isn't all the government's.

You would have to replace RFL/VED income too though because we would all now be driving around in vehicles that are so low emission that they would be exempt under the current schemes.

Oh, & we haven't even mentioned that noticeably fewer young people are inclined to learn to drive/own a car than in previous generations so there may be fewer vehicles on the roads to both create pollution & contribute to taxation income... 

[IanML]

10 hours ago, Heidfirst said:

Oh, & we haven't even mentioned that noticeably fewer young people are inclined to learn to drive/own a car than in previous generations so there may be fewer vehicles on the roads to both create pollution & contribute to taxation income... 

In that case, other taxes WILL rise.  Taxes change - there's no tax on windows or tea any more!

[FROSTYBALLS]

Whether we have VED in 20+ years time is anyone's guess. What is fairly safe to assume is that future governments will at least need to raise a similar amount of revenue as it does now, if not more.

We have already seen some electric vehicles being subject to VED with the current system and, with the changes to diesel vehicle taxation due to be announced in the Autumn statement, and a possible reduction in diesel ownership within the next few years, it is probable that the taxation of electric vehicles will be widened.

[IanML]

2 hours ago, FROSTYBALLS said:

We have already seen some electric vehicles being subject to VED with the current system ....

Out of interest, are they hybrids?

[FROSTYBALLS]

Vehicles with emissions above zero, incur the first year based on CO2 emissions, and then the standard rate of £140 for the subsequent years. Additionally cars with a list price above £40,000 will pay a supplement of £310 per year over and above the standard rate.

So some will be hybrids, some will be plug-in hybrids and some will be electric.

As regards the list price, discounts are excluded - so if one buys a car with a list price of £40,100, and get a discount of £2,000, the list price remains at £40,100 and the supplement is payable.

If one adds options to a car with a lower list price, which takes it over the £40,000, the supplement is payable.

[IanML]

So electric cars over £40,000 pay £310 per year - why do I not feel more sympathetic?

[FROSTYBALLS]

No - they pay £450 (the standard rate of £140 plus the supplement of £310).