Pay Per Mile Tax – Are you willing to pay?
The government is considering a new ‘pay per mile tax’ for the UK’s drivers. They could introduce this new scheme as early as the autumn budget.
Those who have proposed the scheme, say that a pay per mile tax would be a fairer system. Low milage drivers would naturally pay less, and could potentially save money. Those who drive long distances for a living however, could be considerably worse off.
How Would it Work?
So how would the amount of mileage that drivers cover be calculated? The most obvious method would be to use the odometer figure recorded at each MOT. The MOT station could then send this to the taxman, and they would calculate your charge for use of the roads from that. This would not work for new cars however, which will be three years old before they need to go for an MOT. Perhaps the government will also change the MOT rules to get around this?
Another reason for the introduction of this new scheme, could be the falling tax revenue due to electric vehicles. Currently, all-electric car drivers are exempt from paying excise duty. And the more people who change over to electric, the less the government coffers receive. So, without a doubt, drivers of electric cars will be about to take the biggest hit if this goes ahead.
There is also the suggestion that the pay per mile tax could be at a higher rate for driving miles during peak traffic hours. Though goodness knows how anyone would be able to work that one out! The only possible way to be to use GPS trackers on all vehicles. And that would not go down very well with those of us who value our privacy!
Clocking
There is one major concern if this scheme were to come into force; the likelihood of a huge increase in ‘clocking’. Changing the mileage reading on the odometer, has long been a dodgy practise of shady second-hand car dealers. But if high readings meant huge tax bills, the temptation for many could be to try and alter the number before going for an MOT. In the days of analogue odometers, changing a mileage reading was much easier than with today’s digital systems. But it is certainly not beyond the ability of someone in the know, to access and change things electronically.
On the surface, a scheme where those who drive more should pay more, might look to be a fairer system of taxation. But it remains to be seen if anyone could actually work out a foolproof way to make it work.