New pay-per-mile car tax changes comes with 'impossible task' as certain drivers at risk
EXCLUSIVE: New pay-per-mile car tax changes could prevent a headache with specialists still calling for electric vehicles to come with incentives.
Sir Keir Starmer and the Labour Party face an “impossible task” due to new pay-per-mile car tax rules expected on UK roads soon, according to an expert.
Iain Reid, head of editorial at Carwow, stressed officials face a strict balancing act between taking revenues and still encouraging owners to switch to electric vehicles (EVs).
EVs have so far been tax-exempt, with the hundreds of pounds in annual savings providing potential owners with a reason to switch.
However, the Government is now keen to fill a supposed £22billion black hole in public finances, with taxes likely to rise.
One of the reasons behind a pay-per-mile charge is to replace declining fuel duty revenues and vehicle excise duty as more switch away from combustion vehicles.
However, slapping electric car owners with fees could backfire and halt an already slowing EV market in its tracks.
Mr Reid said: “Because the Government has committed to reintroduce the ban on selling new petrol and diesel cars in 2030, it needs to incentivise consumers to make the switch to EVs.
“Can it increase the tax take from drivers while also supporting the switch to EVs? That sounds like an impossible task.”
Iain stressed that he expects “EV running costs to be lower than a petrol or diesel car” even if the tax system is changed.
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It comes after a former chief of staff to ex-chancellor Jeremy Hunt confirmed the treasury had been doing preparatory work around a road pricing system for UK roads.
Although no details have been confirmed, some specialists have suggested the rate could be between 2p and 6p per mile or kilometre.
One expert even hinted that EV owners could face different rates compared to combustion owners.
Earlier this week, Andrew Jervis, founder and chief executive of ClickMechanic stressed a per-mile fee would likely remain based on emissions for the time being.
He explained: “While the exact details of the mooted pay-per-mile scheme remain unknown, it’s understood that motorists whose vehicles contribute more emissions would pay more and vice versa.
“In practice, that means if you drive more often than average and your vehicle emits more emissions than average, you will be hit harder in the pocket.”
