Warning car tax changes could hit families and put people out of work

Car tax plans that could tax drivers by the mile could force people to see their families less, an expert has warned.

The troubled government plans to charge drivers for every kilometer they drive, instead of the flat rate at the moment, could also put many people out of work, the Express reports.

According to several press reports, Chancellor Rishi Sunak would look to the new proposals for kilometer charging to fill a hole in the government budget.

But while some say it could reduce traffic congestion at peak times as people drive less, an expert has warned the cost could hit the poorest – and see a 400 mile journey costing over £ 500.

Such a move could have major implications for those traveling to see extended families – and for businesses where staff have to travel long distances.

Richard Alvin, director of Capital Business Media, which also includes electric car company EV Powered, says those who spend a lot of time on the road would be the most affected.

He said the new tax would make drivers pay “significantly more” to use their car.

Mr Alvin told the Express, “While there is all the sympathy for the Chancellor, these proposed changes will cause families to see their extended family less and traffickers become unemployed, as companies simply cannot afford to use their vehicles. . “

He added: “To be honest, I think it is the small businesses, self-employed drivers or salesmen who spend a lot of time on the road, and the poorest drivers, who will be most affected.

“It is unclear what the charge per mile will be, but initial suggestions are that it could be about the same as the tax on fuel for comparable miles, meaning that a charge of 75 pence per mile could result in a family visit to Yorkshire from London – 400 mile round trip – £ 533.

“[This] significantly more than the equivalent cost of refueling gasoline for the same journey.

“There are rumors that things like employer levies offering free parking to their employees and more charging zones will be introduced in the UK.

“I think the biggest impact all of these will have is that unnecessary travel will decrease.

“I expect people will find it more difficult to deal with the cost of driving a car, be it electric or gasoline.”

The government is in danger of losing £ 40 billion over plans to ban petrol and diesel cars from 2030 and promote electric cars.

This is because the excise duty on fuel and the car tax on motor vehicles will decrease.

In the proposed new system, cars would be installed with so-called telematics devices to track mileage and calculate total fees.

Plans for the scheme are believed to be in the development phase, although they will not be implemented immediately.

Mr Alvin said he expects there will be a change in the way car tax is calculated, but warned it would not be a “positive” update for the driver.

He said: “The fuel tax is 57.95 pa liters for gasoline and diesel vehicles and is on track to raise £ 27.5 billion this financial year, which is equivalent to 1.3 percent of national income, according to the latest forecasts.

The excise duty on vehicles, which will be levied on the purchase of cars based on the emission level, will yield £ 7.1 billion, while the VAT on fuel is worth £ 5.7 billion.

“If the compensation per kilometer does come in and we see the number of drivers on the road decrease, this income will drop significantly.

“I expect to see a change in the way road tax is calculated in the coming years – not a positive one either.”

However, the scheme has received some support.

To write in City AMEamonn Ives, a researcher at the Center for Policy Studies, said, “Under road pricing, a premium would be paid for rush hour travel, while costs would be reduced in quieter periods. This would provide an incentive for those who would like to wait to” to travel in the afternoon, making the roads clearer for those who need to use them the most during peak times. “

Sky News reports that a kilometer charging system was last proposed by Tony Blair’s government in 2007, but has been dropped due to opposition from motorists.

AA President Edmund King said: “The government cannot afford to lose £ 40 billion in fuel and car taxes when the electric revolution begins.

“It has always been assumed that road pricing would be the solution, but it has been increased every five years since 1964 and is still seen by most as a ‘poll tax on wheels’.”

Nicholas Lyes, RAC’s head of road policy, said: “While not paying car tax is clearly an incentive to go all-electric at the moment, very soon we will need a system that can fairly tax both conventional powered as battery electric vehicles.

“If this is not addressed, we risk ending up in a situation where petrol and diesel drivers continue to pay all taxes for using the roads, which is not sustainable.”

The Treasury has not commented on the proposals.