New diesel car owners may have to pay up to £520 more a year in tax under new rules that came into force last week. Should diesel drivers pay more? Or is there a better way calculated vehicle tax?
New diesel cars that do not comply with future RDE2 emission levels will be charged more tax in the first year of ownership – potentially up to £520 – the Chancellor, Philip Hammond, announced in his autumn statement last year. And the new rules have just come into force.
But this rule only applies to new cars registered after 1 April 2018. A completely different system of tax, based on CO2 emissions, applies to cars registered between March 2001 and March 2017; and a third set of rules applies to cars registered between 1 April 2017 and 1 April 2018.
Confused? You’re not alone. As our car expert Adrian Porter explains in our recent guide to the changes ‘car tax is getting confusing‘.
Might there be a simpler – and potentially fairer – way to pay vehicle tax? Here are some ideas.
Replace it with a fuel duty
We already have the highest fuel duty in Europe – 58p per litre – but there have been calls to increase it further and abolish vehicle tax at the same time.
Proponents argue it would make us drive more efficiently and safely, as some drivers would use less fuel. As discussed here on Which? Convo in 2010, a fuel duty would probably mean we’d all be forced to think twice before jumping in the car – which could also encourage alternative forms of transport.
And should drivers pay more for diesel at the pumps because it produces more NOx?
Base it on mileage
A similar idea is to charge motorists for how much they actually use the roads. That way those who use the roads more would pay more – and those owning cars but who use them less often would pay less.
Commonly known as a ‘vehicle miles travelled tax’, it’s already levied on heavy goods vehicles (HGV) in many European countries and some US states. New Zealand applies it to diesel cars too.
But, as critics and privacy advocates point out, it means cars would have to be tracked by the government.
Higher rates for commercial vehicles?
Some campaign groups argue large commercial vehicles, such as HGVs, are massively under taxed based on the amount of damage they do to the roads.
‘The standard 44 tonne HGV, which is the industry workhorse, causes 136,000 times more damage to road infrastructure than a Ford Focus because the damaging power rises exponentially as weight increases’, The Campaign for Better Transport claims.
HGVs do £6bn more in damage to UK roads than they pay in tax, the group claim. And their solution: a distance-based levy for heavy goods vehicles – like what’s in place in Germany.
So what’s the answer? How would you calculate car tax? Could it be simplified and just levied when we buy fuel? And should business and industry be paying more to use our roads?
This is a guest contribution by Oscar Webb. All views expressed here are Oscar’s own and not necessarily also shared by Which?.