Elderly motorists and those who don't clock up many miles could see benefits from a proposed pay-per-mile road tax system, as well as adjustments in Vehicle Excise Duty (VED) rates. Road users, particularly older drivers, are told that the changes to pay-per-mile rules might work in their favour.
Tax expert Bradley Post, MD at RIFT said that under the proposed scheme, there's potential for considerable savings for those who travel less, reports Birmingham Live.
Bradley said: "The pay-per-mile car tax has been proposed as a replacement to car tax which will essentially see motorists charged based on the number of miles they drive each year. The idea behind it is to replace fuel duty tax revenues that the government will lose out on as more drivers transition to electric vehicles."
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He continues by highlighting: "Those due to benefit most are the motorists who don't rack up the miles, older motorists and those who live in more urban areas with good public transport links."
This new system would be a departure from the current VED, focusing on drivers' yearly mileage instead.
The cross-party Commons transport select committee explains that the overall tax burden wouldn't drastically change. Motorists can expect to pay approximately the same amount as the present car tax (also known as vehicle excise duty).
The rate would account for both the distance travelled and the environmental impact of the vehicle.
Lower-emission vehicles will benefit from reduced rates in the proposed changes to the car tax system, aligning with current incentives, but owners of electric cars will no longer be exempt from taxation. Transport specialists argue that increased taxes are essential not only for revenue but also to alleviate congestion, highlighting that motorists currently lose a billion hours annually to traffic jams.
"Unless we want to lose an awful lot of tax revenue, we're going to have to move to some way of taxing driving and the obvious way to do that is some kind of road pricing," explains Paul Johnson, director of the Institute for Fiscal Studies.
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2024-07-25T07:49:55Z dg43tfdfdgfd