Car tax updates could soon see driver’s forced to pay for each mile they travel under a new system designed to replace the current vehicle emissions scheme. Updates to fuel duty chargers are also being considered having been frozen by the Conservatives since 2010. Both of these updates could see many poorer drivers forced off the roads in a major shock.
Pay per mile car tax
The Chancellor is considering introducing a new pay per mile scheme closer to the new 2030 petrol and diesel car ban.
A similar proposal was met with heavy opposition in 2007 after more than two million drivers protested against the scheme.
Richard Alvin, Group Director of Capital Business Media including electric car firm EV powered has warned the costs would affect the “poorest motorists”.
He claims drivers could be charged up to 75p per mile to use the pads which could see drivers pay over £500 for a simple trip.
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He said: “In all honesty, I think it’s the small businesses, self-employed drivers or salespeople who spend a lot of time on the road, and the poorest motorists who will be affected the most.
“It is unclear what the per-mile charge will be, but early suggestions are that it could be around the same as fuel duty for similar mileage.
“[This means] a 75 pence per mile charge could result in a family visit to Yorkshire from London – a round trip of 400 miles – costing £533, which is substantially more than the equivalent cost of filling up with petrol for the same journey.”
With the average driver travelling 7,400 miles each year, the new system could see motorists fork out £5,850 per year.
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Data from the RAC Foundation has revealed that on average, each commuting trip is ten miles long or a 20-mile round trip.
The charge would see motorists charged £15 per day to use the roads or £75 per week.
This would average out at £3,600 over a 48-week working year before costs for any personal use is added.
The scheme is being considered after the Treasury warned up to £40billion could be lost due to the switch to electric vehicles.
Fuel Duty increase
Rishi Sunak committed a fuel duty freeze back in March after claiming people “relied on their cars”.
However, the charge could be under threat in the Spring budget next March with some MPs supporting up to a 5p increase on the 57.95p per litre charge.
This level of increase would see drivers pay an extra £2.75 every time they filled up a 55-litre fuel tank.
For drivers who top up every week, this would equate to a £143 increase over the course of a year.
However, it is believed that successive freezes have cost the Treasury over £100billion and extra funding would be needed to pay for coronavirus debt.
Howard Cox, founder of Fair Fuel Uk said: “The highest-taxed drivers in the world, do not need a virtue-signalling fuel duty hike to appease a very small green minority.
“They like all consumers, along with small businesses need more money in their pockets to spend, so the Covid wrecked economy recovers through incentivisation not draconian fiscal punishment.”