[Closed] Osborne brings back road tax!

What I don't understand is, given the cash-strapped budget, why didn't they leave the higher emissions bandings in place?

Is a tax break for high emission vehicles really a priority at the moment?

It is funny how people react to pricing, my aunt was bragging to me that her new car only pays £30 a year VED. She didn't like me telling her that she spent £15 000 to save £130. That and people who trade in their perfectly good 3 year old car for a new one on the basis that it may start costing money as it now needs a MOT 🙄

wrong thread

I've just been reading the [url= https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443232/50325_Summer_Budget_15_Web_Accessible.pdf ]George's Big Red Book[/url] (PDF).

For those that can't be bothered leafing through it, here is the section on VED and the "road fund":

[img] [/img]

Firstly yep, if you emit just 1 gram of CO2 per km then you'll pay exactly the same as someone emitting 255 times that amount.

Because that is "fair".

As is the £1860 tax break for the worst polluting cars.

But don't worry it [i]"continues to incentivise the cleanest cars"[/i].. er.. somehow... Maybe they'll offer smiley face stickers or something.

Secondly, note that (in England) the new "road fund" only covers the "[url= https://en.wikipedia.org/wiki/Highways_England ]English Strategic Road Network[/url]", which is basically the motorways and some larger dual-carriageways.

So at least when some idiot is braying that he pays "road tax" for the "road fund" so he has more right to be on the road than freeloading cyclists, we can reply that the road fund contributes absolutely nothing to the minor roads that we use.

Granted it's not much of a retort - but it's a start!

Oops - my apologies, I misread the table in my anger 😳 - it's not a £1860 tax break.

Current Band M (over 255g/km) rate is £490 a year (£1065 first year).
So it's only a £350 per year tax break (but £935 extra in the first year).

Vehicles should be paying tax based on their use of the road. I'd be happy with that whether it be based on footprint or weight.

The flat rate £140 covers that for cars then as taking into account safe gaps to front and rear all cars use about the same road space.

Well, Osborne is correct to say that the change incentivizes the cleanest cars (only), but one wonders what will happen to sales of low emitting runabouts, hybrids and the prevalence of other technology like stop/start systems once the new regime is in force.

Sounds like they're aligning it with the push for EV's and autonomous to me.

Or just thick.

Did everyone miss the footnote as well?

"cars with a list price of over £40,000 when new will pay a supplement of £310 per year on top of the standard rate, for five years"

So my nice, reasonable fuel efficient Merc C220, with it's less than 118 CO2s and currently paying £30 per year VED, would under the new scheme be paying £450 per year.

Time to buy that V8 Jag then I think. Will still be paying £450 per year and I can negotiate the £2000 first year off the purchase price.

Cheers Osbourne! 🙂

Cor, looking at the table above it's got the wiff of one of Gideon's pals daring him to do it for a laugh.

It seems idiotic to hit below say 100mg with the same cost as much bigger/faster motors. For those that say it's irrelevant compared to the price of the car you are wrong. Most people will get new cars on some finance deal or other so pay say £350 a month. The choice of paying an extra £3 or £50 a month really does (did) come in to the equation.

[quote=GrahamS ]IFirstly yep, if you emit just 1 gram of CO2 per km then you'll pay exactly the same as someone emitting 255 times that amount.
Because that is "fair".

I thought we all knew by now what it means when Gideon describes something as "fair"

cant see what you problems are.. my 1959 ford pop will still be free and no longer requires an mot.. as do they 12 motorcycles i have.. what has changed in the last couple of years is that i have sold all (bar 2) pre 1960 bikes and bought pre 60 exclusively since the MOT was shelevd.. the EU is BRILLIANT..

Greenest Government Ever innit. Fair and bold. Possibly even long term.

Time to buy that V8 Jag then I think. Will still be paying £450 per year and I can negotiate the £2000 first year off the purchase price.

And how many hundreds more in fuel costs if you buy the Jag? High mpg cars save on fuel and fuel tax means the drivers who do the most miles in the least fuel efficient cars pay the most tax. Seems fairer to me than someone with a car that sits on their drive most of the time paying the same eco road tax penalty as someone who drives 30k a year.

And how many hundreds more in fuel costs if you buy the Jag? High mpg cars save on fuel and fuel tax means the drivers who do the most miles in the least fuel efficient cars pay the most tax. Seems fairer to me than someone with a car that sits on their drive most of the time paying the same eco road tax penalty as someone who drives 30k a year.

On my sums, a V8 Jaguar XFR will cost me about 25ppm. My C class costs 11ppm. The vast majority of my 15k per year is expensed at 20ppm petrol or 14ppm diesel. I've already decided the extra cost to me was fine for the pleasure of driving the Jaguar. Just need to wait a year for the lease to be up on the Merc.

That said, having revisited my working for the purposes of this thread, I'm reminded that the 3.0d S version of the XF is a better bang per buck. Nearly XFR performance but £1000 a year cheaper.

Numbers if you're interested [url= https://dl.dropboxusercontent.com/u/987853/Car%20Running%20Costs.xlsx ]https://dl.dropboxusercontent.com/u/987853/Car%20Running%20Costs.xlsx[/url]

Seems fairer to me than someone with a car that sits on their drive most of the time paying the same eco road tax penalty as someone who drives 30k a year.

Tax on fuel is possibly a fairer way to do it but no government ever wants to add fuel tax as it's a vote loser. Plus the VED tax bands [b]do work[/b] (if what you're actually trying to do is get people to buy more efficient cars)

Tax on fuel is possibly a fairer way to do it but no government ever wants to add fuel tax as it's a vote loser.

Yes except we already have tons of tax on fuel and there were a lot of rises - fuel duty escalator rings a bell.

Seems fairer to me than someone with a car that sits on their drive most of the time paying the same eco road tax penalty as someone who drives 30k a year.

People driving 30k a year aren't much of a problem, it's the ones doing short journeys in town every day dropping kids at school which pollute the most where people live. People bombing up and down motorways in cars don't pollute inhabited areas and don't do a lot of damage to roads.

People driving 30k a year aren't much of a problem, it's the ones doing short journeys in town every day dropping kids at school

Maybe in terms of local air quality, but not in overall environmental impact. Driving 3 miles a day uses up hardly any fuel overall.

Plus there are plenty of motorways in and around cities, often chocablock with traffic too.

It's a Poll Tax for cars.

[i]Plus the VED tax bands do work (if what you're actually trying to do is get people to buy more efficient cars)[/i]

Well, they [i]did[/i] work. Now, all they do is make the initial purchase potentially more expensive. Ongoing running costs after the first year are the same whatever you buy, unless you buy something at 0g/km, or something over £40k.

All they've really done is added another purchase tax (albeit on a sliding scale based on emissions).

Any idea if this impacts vans. Pain in the arse that my 1.3 diesel 60mpg van costs £230 a year

Just happened across this. Interesting take on it, perhaps.

https://waronthemotorist.wordpress.com/2015/07/13/motorists-are-welcome-to-the-roads-they-pay-for/

That's sort of the retort I was referring to above.

Drivers will (soon) "pay for the roads" - but [i]only[/i] the Strategic Road Network, which we don't cycle on anyway as it is motorway-class roads.

So their contribution to local roads, B roads, etc that we [i]do[/i] cycle on will be exactly the same as everyone elses.

Sadly I suspect this detail will be lost on most people. Gideon was careful to call it a "road fund" rather than a "motorway fund" and I've already heard several people say it will be great to get all the potholes fixed in their road... 🙄

I've heard that the whole point about strategic (eg Motorway) allocation is a precursor to tolls on motorway usage in general...

Oops - my apologies, I misread the table in my anger - it's not a £1860 tax break.

Current Band M (over 255g/km) rate is £490 a year (£1065 first year).
So it's only a £350 per year tax break (but £935 extra in the first year).

So, given most lease deals on new cars are 3 years, it works out at;
currently 1065+490+490=2045
revised 2000+140+140=2280

so not a 'tax break' on 'new' cars, but on those buying them second hand? No wonder you are angry, your argument is being undermined with every bit of research you do LOL!

So, given most lease deals on new cars are 3 years, it works out at;
currently 1065+490+490=2045
revised 2000+140+140=2280

Convenient that you picked 3 years, because once you get to four years it starts to swing the other way and continues that way over the lifetime of the car:

1065+490+490+490=£2535
2000+140+140+140=£2420

Surely TCO matters more than first year costs?

so not a 'tax break' on 'new' cars, but on those buying them second hand?

Read back.

I never said it was a tax break on new cars I said it was [i]"a tax break for the worst polluting cars"[/i] because (after the first year) [i]"if you emit just 1 gram of CO2 per km then you'll pay exactly the same as someone emitting 255 times that amount"[/i].

Again. This will only apply to [b]NEW[/b] cars. People buying new cars will be the ones paying the tax, most of them will be on lease deals which are typically 3 years.

And what happens at the end of those 3 years. Typically?

The cars are bought by someone else, with the original owner going on the buy another new car.

Yes the new owner will be getting a 'tax break' (not sure if it would still be classed as a tax break? given it'll be 5 years from now) but the way the system is set-up penalises the initial buyer, so you'd presume the weighting of second hand cars available would be towards the lower output.

How many sub £40k cars can you buy that are in the higher bands? above £40k get additional £tax for first 5 years too dont forget.

Just had a play with the figures in Excel to better understand the impact of those first year tax changes on your first 3 years of ownership argument.

[img] [/img]

Even accounting for those big first year costs, there doesn't look like a massive incentive to go for a 1g/km car versus a 149g/km car.

In the old system that would have been a £435 difference.

If I've got my sums right this time then under the new system it is only a £130 difference.

Picking up on GrahamS' previous comments, my understanding of the current taxation system is that all local roads, pavements etc are paid for out of local council taxes.

Only major trunk roads and motorways are paid for with 'VED tax' and this new system will be no different.

How about we introduce a system whereby non residents of a particular county council get charged for using local roads? It'd be fair, if not a tad complicated to enforce! 👿

Only major trunk roads and motorways are paid for with 'VED tax'

I didn't think any of it was ringfenced.

http://road.cc/content/news/51144-minister-roads-insists-perpetuating-road-tax-myth

Money raised at national level from the likes of Vehicle Excise Duty and fuel tax go into a central pot, along with other monies raised through income and corporation taxes and other charges and duties. That central pot then contributes towards road-building projects and maintenance carried out on the national road infrastructure - motorways and major trunk roads. Similarly, works at local level are funded from revenue from council tax and business rates.

There is emphatically no separate, dedicated fund for roads; motorists do 'pay for roads,' but only in the meaning that we all 'pay for roads', and in absolutely no other sense.

my understanding of the current taxation system is that all local roads, pavements etc are paid for out of local council taxes.

Only major trunk roads and motorways are paid for with 'VED tax' and this new system will be no different.

As I understand it nothing in the current system is hypothecated/ring-fenced, so all roads are paid for using the same big pot of "taxpayer's money" (raised from [i]all[/i] taxes and duties).

But...

Yes, you can also argue that local council budgets are required to cover local road repairs, lighting and street cleaning. So that is where part of your council tax is spent.

[img] [/img]
[url= http://www.theguardian.com/public-leaders-network/2015/mar/24/how-council-tax-pound-spent ]Source: Local Gov Assoc via The Guardian[/url]

There is (currently) no link between VED and road funding, beyond the fact that [i]all[/i] taxes contribute to road funding.

How about we introduce a system whereby non residents of a particular county council get charged for using local roads? It'd be fair, if not a tad complicated to enforce!

As others have suggested, "pay by use" road tolls may very well be the next logical step in a "road fund".

I'm off to France, bye bye 🙂

Sorry Graham, I should have qualified the VED tax goes into the general tax pot and it's from this that the trunk roads are paid for. Your graph is a useful reminder of where our Poll tax goes

The only hypothecated tax I can think of is the TV License

Suspect in a few years you'll be buying road access like you now pay for a mobile phone or home modem with web access.

I agree with wilburt, and I suspect that will come in via autonomous driving. The government won't have to levy a road pricing style congestion tax, because the free-market will do a similar thing like it currently does with Uber.

I guess it could go even further and lead to the complete privatisation of road maintenance and building, with companies running fleets of autonomous cars paying companies money to build and maintain the road network.

I don't know where bicycles would fit into this....

I don't know where bicycles would fit into this....