No more Zero vehicle band tax on electric cars

This was announced in a budget.  It is inevitable that if the push towards EVs started to “work” that the fall in VED revenue would require a rethink on policy, especially as those vehicles only produce 5% vat on their energy and no fuel duty.

Seems premature, and leaves the tax system in a mess.  A dirty diesel spewing pollution ends up less than an EV producing nothing.  Time for a reset on all bands.

The diesel pays far more tax overall though in fuel duty and VAT and is more expensive to buy as a company car.

Time for a reset on all bands.

So you're saying that someone who can afford a shiny new electric car should pay less tax than someone who cannot?

The diesel pays far more tax overall though in fuel duty and VAT

But isn't the tax band supposed to be representative of emissions? I agree that electric vehicles need to pay their fair share of the costs associated with providing infrastructure, but this tax change is merely to appease the anti-EV lobby / climate change deniers.

A dirty diesel spewing pollution ends up less than an EV producing nothing

Yep ours is £20 a year. There's plenty of other incentived for EVs, particularly via salary sacrifice so it makes sense. In a few years they'll be cheaper than the equivalent petrol cars so no need for other tax payers to subsidize their use

Bound to get re-set when the Govt start losing money ! If you can afford £40k plus cars, you can afford the measly amount of VED.

 I agree that electric vehicles need to pay their fair share of the costs associated with providing infrastructure

End of conversation then?

(It was never meant to be an emissions tax but like everything.... stuff changes)

A dirty diesel spewing pollution ends up less than an EV producing nothing.

Although it's not nothing, obvs.

Surely the +£40k addition is irrelevant of emissions, so ought to paid?

The money raised from VED isn't used for the road infrastructure, it goes into central funds.

Inevitable that this would happen, but if a private company had lured a consumer into buying a product with a free subscription & then started charging once they were tied in I suspect most people would cry foul.

So you’re saying that someone who can afford a shiny new electric car should pay less tax than someone who cannot?

People who choose to run dirty cancerwagons shouldn't be financially penalised?

Bound to get re-set when the Govt start losing money ! If you can afford £40k plus cars, you can afford the measly amount of VED.

Except, of course, that thanks to inflation that £40,000 should actually be closer to £50,000.

It's hard to take a tax described as a "luxury car" tax seriously when the owner of a Rolls Royce pays exactly the same as a Golf or Citroen DS4.

Or is this the STW theme of "they earn more than me so they're bastards who should be taxed until their take-home is the same" kicking in? I would guess from the space between the last word in the sentence and the exclamation mark you're of the typewriter generation?

Before getting his Tesla a neighbour had an Audi S5, range rover & a rolls - ved alone must have been near £1.5k let alone what he paid over in fuel duty - now he pays just £16 to fill up his EV & only 5% of that is tax, so inevitable that zero tax bands had to come to an end at some point.

Inevitable that this would happen, but if a private company had lured a consumer into buying a product with a free subscription & then started charging once they were tied in I suspect most people would cry foul.

It happened with petrol cars too - there were loads with zero or £20/year VED. You won't find one now with tax that low.

Electric cars still cause indirect pollution and damage to roads - they don't drive along emitting rose petals.

They should've tiered it on efficiency and kept extra low rates to reward you for buying smaller cars with small kWh batteries to continue the push for efficiency.  Buy a 3 ton electric SUV that only manages 3miles/kWh then pay more tax.

VED was originally set based on engine size and CO2 emissions, then it changed slightly in 2017 to an initial payment based on emissions and then a flat rate for each year afterwards.

EV and Hybrid were obviously low/zero tax to provide an incentive to buy one over a petrol or diesel car which would incur an extra cost at time of purchase (although obviously that doesn't apply if you're buying S/H).

But yes, there was always going to be a financial black home in the future based on lower income from both VED and from fuel duty. The obvious answer is pay-per-mile but that's political suicide which successive Governments of both colours have shown no inclination to address. Even Sadiq Khan was forced to rule it out in the recent Mayoral election, largely based on Tory lies that he'd be introducing it. However, it was (to all intents and purposes) not far off being given the green light - TfL have done *loads* of work on this, far more than DfT have managed.

spooky_b329

Full Member
They should’ve tiered it on efficiency and kept extra low rates to reward you for buying smaller cars with small kWh batteries to continue the push for efficiency.  Buy a 3 ton electric SUV that only manages 3miles/kWh then pay more tax.

Totally agree, a missed opportunity.

People who choose to run dirty cancerwagons shouldn’t be financially penalised?

Vast numbers of people don't have a choice..... but you may not see that from your high horse.

Jesus ...... this place!

Vast numbers of people don’t have a choice….. but you may not see that from your high horse.

Jesus …… this place!

Yep, around our place most folk drive 10 year or older cars and don't tend to have the ability to nip down the local garage and chuck 50k on a car, or get the finance or tax benefits via their job to fund one.

But yes, there was always going to be a financial black home in the future based on lower income from both VED and from fuel duty.

Agreed, but when you look at the forecast VED from the OBR for the next few years the amount of increase in revenue is significantly more than the last 30 years.  In other words we are all getting our pants pulled down.  https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/vehicle-excise-duty/

"Inevitable that this would happen, but if a private company had lured a consumer into buying a product with a free subscription & then started charging once they were tied in I suspect most people would cry foul."

This is what just about every private company in the world does with every subscription product.

(OK sometimes it's just a discount rather than exactly free, but it's hardly unusual behaviour and I suspect approximately zero people will be surprised by the ending of the zero tax rate for EVs.)

Any tax on vehicles (I think) should be based on mileage and use regardless of what you drive, can't be that difficult to work out considering most of us have to have an MOT every year that records mileage. If you use it a lot you pay more, simple. Rich Santa Cruz owners in their 3 ton EV monster trucks breaking up the roads doing 30k miles a year should pay more than the old lady in her old Nissan Micra at £250 a year in a village in Kent going to Tescos once a week.

Any tax on vehicles (I think) should be based on mileage and use regardless of what you drive

It mostly already is. Around 50% of the pump price of petrol and diesel is tax and duty. Of course maybe you want to disadvantage rural commitments even further - you know, the ones with shitty public transport links and higher distances to services etc?

People who choose to run dirty cancerwagons shouldn’t be financially penalised?

Yes they should

www.theconversation.com/air-pollution-from-brake-dust-may-be-as-harmful-as-diesel-exhaust-on-immune-cells-new-study-129594

www.theguardian.com/environment/2023/feb/23/health-impact-tyre-particles-increasing-concern-air-pollution

If you use it a lot you pay more, simple.

...let's apply that same theory to council tax! Got loads of people living in your house using council resources? Why not tax them individually - we could call it Poll Tax. Don't think that went down well!

By default, if you drive more it costs you more in fuel/leccy/repairs/tyres/pasties at services etc., and brings in tax revenue on all those products.

Vast numbers of people don’t have a choice….. but you may not see that from your high horse.

Jesus …… this place!

No doubt it we scoot over to the other political forums the same posters will be crying out about the working classes. I guess people only really give a **** about them up until the point it no longer serves their political bias or pocket...

don’t tend to have the ability to nip down the local garage and chuck 50k on a car, or get the finance or tax benefits via their job to fund one.

Me neither, still have an EV though. I can't afford a new ICE car either. Used cars are a thing.

They should’ve tiered it on efficiency and kept extra low rates to reward you for buying smaller cars with small kWh batteries to continue the push for efficiency.  Buy a 3 ton electric SUV that only manages 3miles/kWh then pay more tax.

As @multi21 says, a missed opportunity. Recent Harry's Garage video revisiting the Model 3 was an eye opener for me. I didn't realise how crap the efficiency of some EVs is - he singled out things like the BMW i5, some big Lotus thing as being particularly poor, with the Model 3 getting 75% better efficiency with over 4/miles/kWh or something. Sub £40k and 1750kg for the basic Model 3 explains it I guess.

Yeah been on its way for along time. No matter to me as I’m going back to IICE due to a change in personal circumstance,, shame as much preferred the `EV.

Any tax on vehicles (I think) should be based on mileage and use regardless of what you drive, can’t be that difficult to work out considering most of us have to have an MOT every year that records mileage. If you use it a lot you pay more, simple. Rich Santa Cruz owners in their 3 ton EV monster trucks breaking up the roads doing 30k miles a year should pay more than the old lady in her old Nissan Micra at £250 a year in a village in Kent going to Tescos once a week.R

What a weird statement.  You have taken a position and then blurred it by varying a different control factor.

Just out of interest, who do you think should pay more between:

Rich Santa Cruz owner in their 3 ton EV breaking up the local roads doing their monthly trip to the local TC.

Old lady in her Nissan Micra in a village in Kent doing a weekly trip to the not very local Aldi

They should’ve tiered it on efficiency and kept extra low rates to reward you for buying smaller cars with small kWh batteries to continue the push for efficiency.  Buy a 3 ton electric SUV that only manages 3miles/kWh then pay more tax.

I agree, at some point they're going to have to do something because:

a) Roads need paying for if people want to drive

b) Car sizes are getting out of hand.

I got overtaken riding home on Sunday by an I7 on Caversham bridge which is 4 (admittedly narrow) narrow lanes and it simply didn't fit in a lane, it had to straddle both lanes, and carry on doing that at the roundabout blocking both the left turn and straight ahead lanes.  It's absolutely insane.

Not just EV's either, there's a Ford Raptor and a couple of W**kPanzers that between them pretty much block through traffic on the nearby housing estate.  It was originally built with a bus gate to make it an LTN but the council took it out as the parking meant there was no foreseeable way they could ever have driven a bus through. Should have been double yellowed form the start.

Road pricing would seem to be at least a partial way forward, and an excellent way to make people think twice before hopping in the car for short trips, but good luck to the political party who tries to introduce that.

Any tax on vehicles (I think) should be based on mileage

It mostly already is for ICEs, by far the most tax you pay is on fuel.

VED based on weight&emissions maybe? As heavy vehicles wear the roads more.

IMO it should be based on some kind of size/weight class, as well as (maybe) annual mileage.

Continually having more and more (bigger) vehicles on our already-struggling road network is just not sustainable (both for actual driving and also for parking reasons). We need to discourage car ownership & use much more - especially the fashion for (unnecessarily? large vehicles) - the only way to do that is through peoples' pockets it seems.

Any tax on vehicles (I think) should be based on mileage and use regardless of what you drive, can’t be that difficult to work out considering most of us have to have an MOT every year that records mileage. If you use it a lot you pay more, simple.

Well done. You have just made the islands, highlands, rural Lakes, Wales and Southwest England even more damn expensive to live, on top of the fuel poverty that already exists in those areas. Additionally you have penalised all the care workers or NHS workers (etc) on low pay who support our most vulnerable in society etc etc.

Pay per mile is deeply unfair.

A combination of emissions, weight, car value, congestion, urban and miles, now that makes some more sense.

We need to discourage car ownership & use much more, the only way to do that is through peoples’ pockets it seems.

I fully disagree.  You cannot simply penalise people for doing what they need to do.  It's unfair to those who have no alternative, and is also deeply unpopular and in a democratic country, that's a problem.  You need to provide effective and attractive alternatives, then incentivise people to use them.

VED based on weight&emissions maybe? As heavy vehicles wear the roads more.

The weight is a red herring as whilst heavier cars do wear the road more, it's insignificant to the damage caused by HGVs which are largely needed.

You have just made the islands, highlands, rural Lakes, Wales and Southwest England even more damn expensive to live

You cannot simply penalise people for doing what they need to do.

You need to provide effective and attractive alternatives, then incentivise people to use them.

You need to both discourage the behaviour that you want less of and encourage the behaviour you want more of.

The lesson of the Netherlands is that it both needs to be easier to use public transport +/- bicycles and harder to use cars. Paradoxically this also makes it easier to use cars, because when it’s successful traffic is massively reduced.

Of course maybe you want to disadvantage rural commitments even further – you know, the ones with shitty public transport links and higher distances to services etc?

The problem is big cities have made cars rubbish on their own with traffic and parking and by taxation, emissions zones, etc.  Which then means there's a political will to sort out public transport .

Rural areas have crap public transport because cars are still cheap (there's free parking everywhere) and easy (there's no traffic).

If you made the parking at Ribblehead as expensive as central London I guarantee that all those people driving there to look at the train line would realize you can actually get a train there.  Same with locals, if Aldi and Lidl in Catterick charged £10 to park,  then people in Hawes in their Nissan Micras (Sorry Kojak / Generalist I don't know Kent)  wouldn't drive there and would shop locally at Elijas instead.

or even zero-rate it for those who are genuinely isolated or have no option other than to commute long distances by car

And therein lies a problem.

There's a difference between between the local rural economy (which probably involves very little actually driving, Farmers aren't known for their commutes), and people who live in rural areas. If you live in Hebden, Kirkby Lonsdale, or Hawes and commute in Manchester you are not the victims of this, you are the problem.

I agree, at some point they’re going to have to do something because:

a) Roads need paying for if people want to drive

Any old public money can pay for roads and vehicle excise duty can pay for, you know... that expensive thing... the NHS.

I agree that electric vehicles need to pay their fair share of the costs associated with providing infrastructure

VED doesn't fund infrastructure, it goes into the general taxation pot. Even if it did, it wouldn't come close to providing enough money - we all fund roads from general taxation, whether we own a car or not.

The lesson of the Netherlands is that it both needs to be easier to use public transport +/- bicycles and harder to use cars. Paradoxically this also makes it easier to use cars, because when it’s successful traffic is massively reduced.

Problem comes when one political party is bleating about the War on Drivers, and the other goes on about hard working motorists despite 1:3 households in the UK not having a car, and 1:4 people not being able to drive.

It's hard to believe anyone enjoys sitting in a traffic jam and given that building more roads doesn't work, the solution is exactly as you describe.

You cannot simply penalise people for doing what they need to do.

I thought that was exactly how it works.

Developing tax policy to inhibit non-preferred behaviours is a thing.  I'm not denying that.  Just saying that taxes always get set according to political affordability which only becomes linked to individual voter affordability if the overall revenue curve from an increase reaches an inflection and the opposition drive a wedge into that particular issue in order to screw us elsewhere.  We pay what can be afforded (cf. price of bikes/e-bikes) and we get a chance to cast our vote for one or other pack of scoundrels to form our government.  These rules seem to be constant.