'Urgent car tax changes needed' with car-tracking software proposed for new driving costs


The Transport Select Committee has called on the Government to tax motorists based on the miles travelled as the use of petrol and diesel vehicles decreases. They warned that without urgent action, the UK faces a £35billion “black hole” in its finances, with the Treasury saying revenues would keep pace with changes through the uptake of electric vehicles.

In a grim prediction, the committee warned there is likely to be no revenue from existing tax sources, like fuel duty and Vehicle Excise Duty (VED), by 2040.

The MPs said charging people based on how much they drive, using technology to track cars’ movements, should be considered.

This would take into account the type of vehicle and congestion, and support vulnerable groups including those with mobility issues and people in remote areas.

Nicholas Lyes, RAC head of roads policy, said he is in support of introducing a pay-per-mile scheme, ensuring that all drivers pay a fair cost.

READ MORE: Council fears it’ll lose millions as drivers ‘wise up’ to cameras

“The Treasury needs to get moving on this sooner rather than later.”

The group of MPs clarified that all motorists, whether they have an electric car or not, should pay “the same or less” than they currently do.

The Chair of the Transport Committee, Huw Merriman MP, called the situation “urgent” saying that a national scheme would avoid a “confusing and potentially unfair” patchwork of local schemes.

Caterina Brandmayr, head of climate policy at Green Alliance, urged the Government to act as quickly as possible.

She said: “Despite the inevitable fall in fuel duty revenue as the UK switches from polluting fossil fuel cars to electric vehicles, so far, the chancellor has been silent on the future of road tax.

“But doing nothing is not an option. 

“The Government needs to urgently start a conversation around what the future road tax system should look like, making sure it is designed with fairness in mind and that it supports the transition towards more sustainable transport.”

Similarly, James Blackham, CEO of By Miles, said: “It’s encouraging that the Transport Committee has accepted that flat rate car tax is not fit for purpose, but they’ve missed the mark with the solution.

“There wouldn’t need to be a mass technology roll-out, our simple proposal relies on taking the reading from the mileometer at MOT test time and charging based on the past year’s mileage.

“This simple switch could generate six and a half billion pounds overnight, and make the system so much fairer.

“Our fully costed, low-tech proposal will mean that every driver pays a fair rate of tax for the amount of miles they’ve actually driven.

“We’re urging the Government to introduce this as soon as possible, to make a greener and fairer future for all of us.

“We’ve been calling for a reformed system for a number of years and strongly believe that a pay-by-mile system is the only way.

“In charging by-the-mile, drivers who understand the damaging effects of congestion and pollution will be rewarded for driving less, not punished.”


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