Call to scrap ‘broken’ car tax system in favour of pay-per-mile charging

Call to scrap ‘broken’ car tax system in favour of pay-per-mile charging
Call to scrap ‘broken’ car tax system in favour of pay-per-mile charging

The Government is being urged to scrap the current car tax system amid claims it is unfair and does nothing to help reduce transport-related pollution.

Calls are being made for the flat annual charge to be replaced with a pay-as-you-drive system that would charge motorists according to how many miles they do.

Campaigners say that not only is such a system fairer on drivers but it will also help reduce vehicle emissions by making motorists consider how much they use their cars.

High-milers should pay more

Under the current system, car tax (Vehicle Excise Duty) is based on a vehicle’s official CO2 emissions in grams per kilometre but doesn’t take into account how far that car is driven.

That means two drivers of the same model will pay the same in VED even if one of them covers far more miles and contributes more to pollution.

Following recommendations that the UK work to cut its greenhouse gas emissions to zero by 2050, it has been suggested this system does nothing to encourage people to drive less.

The current system charges drivers a flat rate regardless of how many miles their car covers each year. (Picture: Shutterstock)
The current system charges drivers a flat rate regardless of how many miles their car covers each year. (Picture: Shutterstock)

Commenting on the Committee on Climate Change report, co-founder and CEO of telematics firm By Miles, James Blackham said: “If we expect to meet these emissions targets, we need creativity and innovative thinking to bring about real change.

“An area of particular focus should be transport, which makes up 27 per cent of the UK’s greenhouse emissions.

“Today, there’s very little incentive within the system for people to drive less.

Our car tax system is broken, and it’s been broken for a long time.

“High mileage drivers generate more emissions and cause more wear-and-tear to our highways. It stands to reason that they should pay more towards the upkeep of our roads.”

Financial incentive

The Committee on Climate Change has called for the UK to cut its greenhoyuse emissions to zero by 2050. (Picture: Shutterstock)
The Committee on Climate Change has called for the UK to cut its greenhoyuse emissions to zero by 2050. (Picture: Shutterstock)

Blackham argued that the success of the supermarket plastic bag charge shows that people will change their behaviour if there is a financial incentive.

“If we want to change people’s mindsets, we need to shift to a model where people are consciously thinking about each mile they drive,” he said. “We’ve seen a similar approach work in retail. The plastic bag tax has made people acutely aware of every bag they use. Plastic bag sales in England’s ‘big seven’ supermarkets have dropped by 86 per cent since the 5p plastic bag charge was introduced.

“Refocusing the cost of running a car around per-mile metrics is not only fairer, but has the potential to make people more conscious of each mile they drive, reducing emissions as a result.”

Clean air strategy

The Treasury said that the existing taxation system already encouraged drivers to opt for low-emissions vehicles.

A spokesperson said: “Vehicle Excise Duty encourages motorists to go green by choosing cars with low carbon dioxide emissions to help meet our climate change targets.

“Our Clean Air Strategy sets out how we are addressing pollution by investing in technologies to tackle emissions and considering measures aimed at reducing the impacts of polluting diesel vehicles.”

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