Pay-per-mile car tax changes would see 'families and rural motorists' charged more to drive
New pay-per-mile car taxes could be introduced in the October Budget
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Drivers are being warned of price hikes they could see in the coming years if proposals to introduce a pay-per-mile car tax system are adopted by the Government.
A number of prominent organisations and industry experts have called on the Government to consider introducing a system of road pricing to cope with the impending loss of revenue from fuel duty.
The UK is estimated to lose around £30billion per year when the majority of the UK switches to electric vehicles with the sale of petrol and diesel at forecourts set to plummet.
A pay-per-mile system of car tax would see Britons charged based on how much they drive, with this being proposed as a suitable alternative to raising taxes through the sale of fuel.
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Car tax changes are expected to be made to address the drop in revenue from fuel duty
GETTYSome experts have urged Chancellor Rachel Reeves to consider these measures in Labour's first Budget on October 30 as a means to claw back money for the Government, which is already dealing with a £22billion black hole from the previous Conservative administration.
A former top advisor to the previous Conservative Chancellor Jeremy Hunt claimed that the Treasury had called on senior civil servants to "start preparatory work on a road pricing scheme".
Car tax changes are guaranteed to take place in April 2025 when EVs will begin paying the lowest rate of Vehicle Excise Duty as a way to create a "fairer system of taxation".
While this will provide additional funding for the Government, further measures could still be introduced by the Labour Government.
Rhydian Jones, motoring expert at Confused.com car insurance, warned that drivers could face huge cost increases if the proposals are to be introduced either in the coming months or in a couple of years.
He said: "Heading towards the Autumn budget, there are discussions that a new pay-per-mile system for drivers on UK roads could replace the current VED charge of £190."
He noted that this could have some benefits for motorists, especially if they rarely hit the road, meaning they won't have to pay the £190 if they do not drive as much.
Other positives could include reducing congestion on roads, as well as promoting the transition to electric cars to encourage switching to cleaner vehicles.
Despite this, he noted that it could result in a hammer blow for motorists, especially if they drive more often for work, school or leisure.
Jones added: "Commuters, families and those living in more rural areas could face higher costs as they take longer and more frequent journeys
"If variable rates of road charging are used, those who have to travel at peak hours could see higher costs.
“Whatever the outcome, drivers will be waiting with anticipation to see what’s announced next month when it comes to VED, and fuel duty too."
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Some drivers could save on their car tax if they do not travel as often as others
GETTYSuggestions have been made which could see certain motorists, including those who live in rural areas and those who drive for a living, get a number of "free miles" as an incentive to keep them on the road without charging them extortionate costs.
Measures like this have been supported to ensure that lower-income communities are not hammered by any changes to the system of vehicle taxation.
An HM Treasury spokesperson told GB News: “We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”