/ Money, Motoring

Your views on the new car tax rules

Car tax

We recently debated the changes to car tax, which come into force from April 2017. A number of you weren’t so keen on the changes…

Our resident cars expert Adrian Porter wrote in detail about the changes to Vehicle Excise Duty on 1 April.

He explained that after April 2017, all new cars will have two rates of car tax. The first year rate is based on the amount of CO2 a car emits. But from the second year, a standard rate kicks in – £140 per year, for every car, regardless of how much CO2 they emit (only zero-emission cars are exempt). Plus if the car costs over £40,000, you’ll pay an extra £310 per year for five years.

New car tax rules

Jean wasn’t impressed:

‘I am flabbergasted!! It couldn’t be more complicated if it tried!!!’

In response to the new rules, Ian argued that:

‘Zero or low car tax for low emission vehicles is a sign that the government cares about the quality of the environment and the health of those living in urban conurbations. This move shows the opposite.’

However, Steve disagreed. He felt that a flat rate of tax was fair:

‘All vehicles should be taxed the same amount no matter what size engine or type as they all use the same roads!’

A tax on fuel

Dermot0 argued that owners should be taxed according to their usage:

‘If car tax is really about providing a good quality road system rather than raising money for the government’s coffers, then owners should be taxed according to use. The reasonable way to do this is to do away with road tax altogether and put the tax on fuel – that way those who burn more fuel will pay more tax and those who use the roads the most will also pay more.’

In fact, it would seem that a fair few people backed this idea of only having a tax on fuel. Fairforall explained that there were problems with this:

‘I’d love the idea of having just the tax on fuel, where the more you use the more you pay… I’m really up for it. Not fair to those who are on low salary who have to do a lot of miles to their place of work. But I can’t help thinking the extra costs would affect the goods you buy where the goods transportation costs would rise, giving excuse for all goods and food to be price hiked. But, on the other hand, would the distribution companies offset to this by not paying the VED? Or could they get special less fuel tax as a distribution business.’

What do you think about the changes to Vehicle Excise Duty? Do you think they’re fair?

Comments

Vehicle tax should be abandoned all together. The shortfall in revenue should then be calculated and added to fuel costs. Therefore the more mileage you do, the more you pollute the atmosphere and the more you pay. Simple as that! An adjustment should be allowed for lorries and vans transporting goods so that it does not adversely affect hauliers etc and also to avoid adding to inflation by increasing genuine transportation of goods costs.

How often are we to have to read the same old arguments? Each boring contributor trots out the same new [to them] idea of getting rid of road tax, and transferring same to fuel tax.

OF COURSE this is the fairest way of apportioning road usage, getting rid of a large number of bureau[c]rats, and at the same time freeing the police to attend to more immediate matters, instead of sitting by the roadside watching the read-out screen of some cripplingly expensive automatic number plate scanner, before chasing, and apprehending the offending driver…..arranging transport for his or her vehicle to a police pound, and physically writing the case particulars, allowing how many other offenders to pass undetected whilst doing so?

The tax on fuel is already in place, so no expensive costs would be incurred for the changes. The people who use the roads more….would pay more…..end of story.
Bringing pollution into the equation is a red herring…………bigger engines and heavier vehicles use more fuel, and therefore would contribute more to the exchequer.
Another, and sillier, objection, is that the fuel stations will be be doing the job for the taxman……..they already do this, so again, no change.
All this discussion and repetition is a complete waste of time and energy……it will never happen……the politicians of all parties know that increasing tax on fuel would be a vote loser……no matter how sensible, and the [probably hundreds] of unneeded bureau[c]rats, would have to be thinned out or provided with useful work……unthinkable!

I am sorry that some of us boring contributors have been wasting your time Mr Colley.

I never presume anything is politically impossible. Constant dripping wears away stone.

For people with low mileage, scrapping the VED might be a very popular move.

Another chancy Government idea. Clearly revenue has fallen too far, by lots of folks using ‘clean’ cars. As to adding the £140 a year to existing taxes, where will it stop? Do you realise we are still paying a tax introduced in 1957 to cover the cost of the Suez conflict which was added into fuel duty! The Government and big fuel companies will not restuntil fuel is again hiked beyond £1.40 a litre irregardless of price per barrel.

karen says:
14 May 2016

I have looked at the other comments and would like to add mine.firstly I take great exception to the comment that 4×4 owners only have these vehicles to look good. I live in the Cairngorm National Park which has on occasions weather that urban dwellers often don’t see. I need a work horse of a car. We don’t live on a bus route so I use the car to get to work. 24 miles round trip. I also carry out my mother’s personal care. That’s a 90 mile trip. I use, as you can imagin, a lot of fuel in a week. Extra costs on fuel would make life difficult. I object to tax free cars as they use the same roads as I do but pay little or nothing towards the upkeep of the roads. I run a motorbike and gave to pay road tax but have negligible emissions and cause little impact on road surfaces. Do the “Greenies” think this is right or fair. These tax changes will benefit me when my car is essential for daily living. I don’t know how it will effect my motorbike.

There are very different issues facing cities/urban areas and rural areas.

In urban areas people should be discouraged from using cars/4X4s etc as public transport is a real viable option and will progressively become even more fuel efficient per passenger mile and emissions neutral in time.

In rural areas public transport is more often than not not a viable option without heavy subsidies and tend to be over roads that are more challenging to electric vehicles for example. eh majority of the problem exixsts nTransport therefore for rural users is more often than not dependant on personal vehicles cars/4X4s etc and miles travelled to and from work can be well above average.

Does one size fits all VEDs work in this situation?

Angela says:
14 May 2016

A point never considered when talking about electric vehicles is batteries. They have a limited life and contain many hazardous materials that require specialist disposal. Also, what happens when we exhaust the supply of NiCad or whatever is used to make them. Bring on the hydrogen fuel cell!

Joy tennant says:
14 May 2016

Flaming rip off!!!

Steve says:
14 May 2016

What does the price of the car have to do with anything, surely VAT covers that, just another stealth income tax. Abolish this stupid and outdated tax and collect through fuel duty, this would also mean that all of the foreign cars using our roads contribute which is only fair as we have to pay for toll roads there.

To dispense with road tax and add a percentage to the cost of fuel is basically a sound idea but if the system needs to be changed why not revamp the whole system by :-

1, Modify the fuel pump such that it can only be activated by a smart card.
The smart card to be issued by DVLA annually on receipt of prove of insurance and MOT (this will provide the DVLA operatives with something to do and save redundancy payments).
2. Everyone benefits, cost will be reduced due to elimination of illegal road users.
3. NO CARD NO FUEL.

Ian says:
14 May 2016

In Jersey, tax on fuel replaced road tax years ago. Administration costs are negligible: the tax is simply added to the pump price and passed on to the government along with fuel duty already paid by the filling stations to the government. Instead of a tax disc, we display an insurance disc on our windscreens to show that we are insured: these discs arrive with our insurance certificates, provided by whichever UK insurance company we are insured by. So, the system is already in place, tried and proven. It’s simple and fair: the more you use the roads, the more you burn so the more you pay. The more fuel you burn per mile in your gas guzzler, the more you pay. The bigger your vehicle therefore the more you damage the roads, the more it burns and so the more you pay.

r davies says:
15 May 2016

once again the public have been add. we were encouraged to by cars with low co2. now down the road they have done a u turn.i am in my sixties and feel so much for the young and low paid.when are we going to be treated fair.i will tell you NEVER

Harry Robinson says:
15 May 2016

Is this a Government reaction from the VW emission scandal? If so why should the motorists be punished? Talk about changing the rules as the game proceeds; the same rule change should apply to incompetent Governments.

When something is very complicated it is usually full of unforeseen consequences because it was formulated by a plodding half wit. Most situations can be reduced to simplicity if intelligence analysis is applied – seems this is in very short supply (think about electric generation, education, immigration etc).This is not the fault of current government, it is a perennial, so it’s just another example problem of government by the dim witted. The UK is devoid of management skills but I’m assured France is not better and Spain even worse.

isbjorn says:
18 May 2016

The car tax rules are bonkers:- I am trying to puzzle out the best way to make a 4WD campervan out of a VW Transporter – if I buy the basic panel van, I will pay the commercial vehicle VED rate (~£215, the lowest rate); but as soon as I put a window in the side of it, then it becomes a car and I have to pay the highest rate of VED (~£440), but if I fully convert it (~£15,000 extra), it becomes the old PLG (~£225), yet all have the exactly the same engine/specification, which produces exactly the same CO2 ! Also, if I were to buy VW’s ready made campervan (California), then it’s a campervan and gets rated at PLG (~£225), but if I choose to save capital cost up front by buying the pared-down version (Beach), which does not have the DVLA’s minimum conversion requirements to class it as a campervan, then it attracts the full £440 VED rate, because it’s then only a car, even though again, it has the same engine/CO2 specifications.

The tax should simply be solely on the fuel on “the polluter pays” principle – the more one drives and the thirstier one’s engine, then the more one should pay.

It’s ridiculous when a retired person on limited income can buy themselves a luxury “final fling” car, to enjoy their final years pottering about for few 1000 miles a year at huge VED (both up-front and ongoing) whilst someone else on a good wage can create pollution from covering 10,000’s miles per year and pay very little VED at all.

This comment was removed at the request of the user

It seems illogical and unfair that the tax is based on CO2 emission as diesel vehicles have lower CO2 but much higher more harmful NOx and particulate emissions.
In any case, to tax on the potential emission rather than the actual emission is also wrong. For example, a car with an emission rating twice that of another, but driven quarter the distance emits half the pollutants.
A much fairer and simpler system would be to put a fixed levy on petrol and diesel so the more you use the more you pollute and the more you pay. Would act as an incentive to change driving habits too.

I agree that the main tax should be on fuel – which it is, in vat and fuel duty. Annual VED is really a small component of car expenditure. Fuel taxes do penalise those who have thirstier cars and those who do more miles. What they do not necessarily do is deal with NOx emissions. which may depend as much on the engine design as its fuel consumption. The EC have just introduced an on-the-road test to examine NOx emissions under real driving conditions – the RDE test. It will be interesting to see the results and how they will propose setting limits on actual NOx emissions for manufacturers to comply with.

The government clearly isn’t very concerned about discouraging emissions of CO2. They signed up at the Paris Climate Change conference and then promptly ignored its significance. Climate change isn’t just a minor inconvenience but is potentially the greatest single threat we face. Without a liveable habitat we have nothing. At every possible opportunity they should be pointing out the absolute necessity of taking CO2 emissions into account. If they don’t take this seriously how can they expect the general public to understand? It is vital that we should be charged more if our cars pollute more.

Why should we be allowed to pay to pollute more? If pollution is so important we should be imposing reductions. Sitting in slow moving or stationary traffic in towns and cities not only wastes fuel but damages health and the environment. So why not restrict fossil-fueled vehicle access at such times? Or are we not individually that concerned about pollution?

What about older vehicles doing little milage but in rural areas needed for essential transport
There is absolutely no logic to any of this
Time to add the bed to fuel duty and stop this illogical game trying to justify tax most of which does not go to do what it should and pay to have the roads kept in good order
I also think cyclists should make a small contribution and some thought be given to better accommodating them by reward

I don’t understand the sense in this change. Road tax should tax us according to how much we use the road. The efficiency of administering the tax should be considered. In addition, we should also be charged according to the degree to which our choice to use a car contributes to the lack of air quality and environmental cost.

The only way to meet these objectives and ensure payment reflects the costs we incur to the collective society by our individual choice to drive, is to add this tax to fuel charges. We need to fight this and pertition for a change towards a common sense and equitable system of taxation on the road.

I think we need a far more sophisticated way of metering and regulating car and other vehicular use. In the first place, because it is such a vital factor in environmental protection, there needs to be a top limit on the harmful emissions any private passenger road vehicle can release – a limit that no wealthy or profligate person can evade by spending more on their motoring; there should be no more buying of exemptions from pollution control. To the extent that the more mileage is driven the more pollutants are emitted the case for fuel duty to be the main charging mechanism is axiomatic, but I feel there is also a justification for incrementally escalating the fuel duty as mileage increases beyond a standard base level [say 10,000 miles a year]. With existing fuel delivery systems this would require metering and a separate payment system since the surcharge could not at present be levied at the pump [although an adaptation of contactless payment technology could be a way forward with the vehicle’s on-board computer communicating with the fuel pump to recalibrate the price per litre]. Making all this secure from fraud or interference is more challenging than developing the technical solution.

Finally there needs to be some control on who can drive within large towns and cities. People who live within a controlled urban area would need to be permitted to drive within its boundaries, but above that there would be a range of arguments about eligibility or entitlement. In many provincial cities some large firms have over the years been able to provide private car parking spaces for their workers within the city centre. Should that be curtailed? [Or be subject to a levy as Nottingham proposed a few years ago in order to pay for extension of their tramways but in the end did not get statutory approval?]. Do shift workers or emergency services personnel have special claims? Could exceptions be made for electric or hybrid vehicles? Can enough money and land be made available to construct large park-&-ride sites on the periphery with fast and frequent feeder bus services running till late? What would be the future for city-centre public car parks? – reserved for essential workers only, or access rationed on a time slot basis? The Conversation that started on 26/05/2016 called “What makes a good shopping experience?” has already identified convenient parking facilities as one of the prime ingredients: is that sustainable in city centres? Can urban public transport be brought up to continental standards with fast and frequent services running at least between 6 a.m. and Midnight? And what do we do about the people who think they are so important that they must have their exclusive transport to their destination? Other legitimate vehicle users might actually be the creators of wealth and bringers of joy without whose entrepreneurial flair the city would suffer. How long have we got?

29/05/2016

At the beginning of the foregoing post where I said “there needs to be a top limit on the harmful emissions any private passenger road vehicle can release” I should have made it clear that I meant a technical prevention integral with the engine, not just a legal restriction. I meant that cars releasing higher levels of harmful emissions would be banned, not just surcharged through vehicle taxation or through parking permits. The notion that anyone can unnecessarily pollute the environment at will if they pay more has got to be challenged.

I have to take a more cynical view. Have the government found they are getting less revenue that they thought because there has been a bigger uptake on “green” vehicles that they thought? Are they losing out on getting more cash from us? Is avarice athe back of this change? They want to be seen to be green but heaven forbid it means they get less revenue. I regret to say that this change “stinks”.

I think that’s part of it Simon. The revenue from road fuel duty and VAT has also fallen over the last twelve months because of the lower price of petrol and diesel. Insurance Premium Tax was also raised from 9.5% to 10% in the last budget [an increase of over 5%].

The road tax is based on what the manufacturers claim are the CO2 emissions. It has come out that several of them have effectively been manipulating the system so that their vehicles creep in to lower emissions brackets making them cheaper to tax.
As a a result older cars when manufacturers were honest and this manipulation wasn’t done are effectively penalised. I pay £450 for my older 2.3 litre petrol older car and get 28-30 mpg , which is about the manufacturers figure . My brother in law pays £30 (or maybe £0?) for his car and gets 25-27 mpg for his 2.2 litre diesel, when the manufacturers figure is 64 mpg. Our driving styles are similar. Is this fair to me or to the environment?

There is something wrong here and your brother in law should book his car in for a service.

Nick, the badly-specified NEDC test with the loopholes has been around for a long time, so I don’t expect it has been used any differently over its lifetime. You can check on real life mpg (which the NEDC test is acknowledged as not providing) on websites like Honest John. It says “on average cars achieve 85% of their official figure” which, considering the inadequacies of the outdated test that yields the “official figure” (car technology, driving conditions, NEDC driving cycle) might be considered reasonable. I am sure Govt. look at such data when considering taxation so will not take NEDC tests at face value – the EU does not. The WLTP test will hopefully provide laboratory results that are nearer the real life figures.

I suspect something amiss with your brother -in-law’s car that should be investigated.