2 weeks Ago By Jack Mortimer
A top motoring expert has urged Chancellor Rachel Reeves to introduce a new system of taxing all vehicles in the Labour Government's first budget later this week. Whilst plans already announced by the Government will see more motorists pay for their road tax from April 2025, including electric car owners , a proposal made by the think tank Policy Exchange has highlighted some of the advantages of a pay-per-mile system of taxing drivers. Edmund King, President of The AA , wrote a foreword to the proposal, highlighting that the funding would better reflect individual drivers if enforced properly.
He advised: "It is time for the country and our politicians to start seriously debating how we fund roads and sustainable transport in the future. "It offers attractive possibilities to make the tax system more flexible and responsive to the needs of road users. For instance, it could offer free credits or compensation for excessive or overrunning roadworks.
" Under the current system of Vehicle Excise Duty (VED), better known as road tax, vehicles are initially charged a figure based on the amount of carbon dioxide they produce, before being subject to a flat rate of £190 from the second year onwards. However, under a pay-per-mile system of taxation, drivers would be charged a unique figure based on how far they have travelled in their vehicle, with ANPR cameras being used to track how far the vehicle has covered. This figure would likely be based on a small amount for each mile travelled, with some predicting it could be as high as 15p, which could soon mount up.
According to Policy Exchange's proposal, many motorists would see an increase in tax charges, with an EV owner who uses their car for commuting into a congested town three times a week being made to pay £812 per year, an increase of £622 compared to the amount they are set to pay from 2025. A commuter driving five times a week in Zone 4 of London would see an even higher price rise if a pay-per-mile system is introduced, with the organisation highlighting that they would face a £1,570 charge - up more than £980 on the current average rate. Nevertheless, the Government has reassured motorists that they have no plans to introduce a pay-per-mile tax system in the October Budget.
.
