The Government is considering proposals that could make owning cars more expensive for millions of motorists. But why? HM Treasury, of course, has to raise money to maintain and improve roads in the United Kingdom. Vehicle Excise Duty currently contributes about six billion pounds per-year but this could fall in real terms in the near future. This is because cars registered from March 1st 2001 are taxed according to their carbon emissions. The least polluting (100g/km of carbon or less) can be taxed for free whereas discs for gas guzzlers cost considerable sums. Motor manufacturers have therefore responded by making cars more environmentally friendly, so lots of big sellers are now exempt from road tax charges. These include the: Ford Fiesta Style 1.5 TDCi 3dr, the Vauxhall Corsa Exclusiv 1.3CDTi 16v ecoFlex Start/Stop 3dr, and the Volkswagen Polo BlueMotion 1.2 TDI. Every year more and more cars hit the market with low emissions - so road tax has to evolve if it is to contribute a meaningful sum to the Government's coffers.
Proposals To Replace Vehicle Excise Duty
One proposal - the details of which are sketchy - is a two-tier Vehicle Excise Duty. Drivers would pay a small sum to access local routes and minor A-roads, but those who travel on motorways and larger A-roads would pay more. How much could vary according to the route's popularity and/or the weight of – or pollution from – their car. Inevitably, this system could make motoring more expensive for some. The extra cash might then be paid to private companies who would maintain and enhance certain routes. Much like the London Congestion Charge, this expense could be enforced by automatic number plate recognition so motorists could not pay the lesser tax then sneak onto the M3. Surely, though, this two-tier system would force traffic into urban areas which might cause gridlock. Another option is to replace Vehicle Excise Duty with one-off upfront charges on new cars. But this could be problematic too. Why? Because it would make new cars more expensive which would hurt sales. This, of course, could affect associated industries too. Furthermore, is it fair that new buyers pay tax whereas used buyers pay nothing? Perhaps the Government should Scrap Vehicle Excuse Duty and tax fuel more. Those who travel huge distances on motorways - or have gas-guzzlers – would pay more than those who occasionally pop to the shops in a hybrid. Taxation could be set to maintain the current income and be distributed in whatever way best serves the network. Or is that too simple?