Owners of diesel vehicles are being cautioned that they might be the most affected if the Government goes ahead with a proposed pay-per-mile tax system.
This new scheme, which could potentially replace the existing road tax, Vehicle Excise Duty (VED), is rumoured to be on the cards for announcement in the forthcoming October budget in a bid to even out tax contributions among drivers.
G&M Direct Hire’s Marketing Director Majid Ismailzada has expressed concerns that this change could discourage some motorists from taking longer journeys, as reported by Derbyshire Live.
He commented: “It’s clear that many families are concerned about the impact of this new tax. With the cost of fuel and other expenses rising, the added burden of a pay-per-mile tax could make long-distance travel over the holidays less appealing for many.”
Currently, road tax is imposed based on a vehicle’s engine size or its CO2 emissions, with the criteria hinging on the car’s initial registration date.
Diesel vehicles, which typically have larger engines and higher pollution levels, often incur greater road tax costs than their petrol counterparts, particularly if they fail to comply with the Real Driving Emissions 2 (RDE2) standards mandated by the Government.
After the first year, diesel car owners are subject to an annual flat rate of £190, the same as petrol car drivers.
However, this could rise if a pay-per-mile tax system is introduced. The Government has yet to confirm whether it will introduce a pay-per-mile road tax system, leaving drivers uncertain about potential charges.
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Some motoring experts have suggested a fee of 15p per mile driven could be on the horizon. This would likely apply to all vehicles, with some arguing it’s a fair approach for all road users. However, diesel car owners typically clock up more miles than most.
Vehicle financing firm LeaseLoco reports that UK diesel owners average 9,400 miles annually. With a proposed 15p per mile charge, this could mean an annual bill of £1,410 for the average diesel driver.
While some motorists are concerned about the impact of a pay-per-mile system, others suggest it could lead to lower fuel costs. As a flat fee covering all car types, it could result in the current fuel duty – a tax on items like petrol and diesel – being dropped.
The fuel duty rate is currently 53p per litre, so if replaced by a pay-per-mile tax, petrol and diesel could cost less than £1 per litre once more.
The plummeting cost of fuel is set to be a welcome boost for motorists who have felt the crunch of skyrocketing prices to fill their tank for even a daily commute in recent years, as a result of higher prices for all consumer goods.
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