A new pay-per-mile car tax could be announced in the UK within weeks, potentially impacting millions of drivers of petrol, diesel, and electric vehicles. The announcement is expected alongside fuel duty rises in the October budget, with changes taking effect soon after.
While pay-per-mile has not been officially confirmed, strong rumors suggest a system is being developed. This follows claims from Adam Smith, former chief of staff to Jeremy Hunt, that the Treasury has been working on a road pricing system.
The proposed tax has drawn criticism from motorists and advocacy groups. Howard Cox, founder of FairFuelUK, warns that the new charge will “fleece” drivers, adding to the financial burden they already face. He predicts that the October budget will see a significant increase in taxes on drivers, a move he believes will be unprecedented in its scale.
The Labour Government, aiming to address a £22 billion deficit in public finances, appears supportive of the pay-per-mile system. The Transport Committee also recommended introducing a road pricing fee in a 2022 report, citing concerns about declining fuel duty revenues as more motorists switch to electric vehicles.
Experts have speculated on the potential cost of the new tax. The Campaign for Better Transport suggests a 2p per mile charge, while the Resolution Foundation believes rates could be higher, potentially reaching 6p per mile.
The proposed pay-per-mile tax would likely replace the current £190 per year Vehicle Excise Duty (VED) charge. Its impact on drivers, particularly those on lower wages and key workers, remains a significant concern. The potential implementation of this tax could have far-reaching consequences for motorists in the UK.
