Drivers Criticize Rachel Reeves’ ‘Backward’ Car Tax Rule
Plans for a new car tax rule in the UK have drawn criticism from drivers and industry experts alike. Rachel Reeves has been at the center of this controversy following the announcement of a pay-per-mile charge for electric vehicles (EVs). This proposal was revealed during the recent Autumn Budget, with expectations for it to commence in 2028.
Overview of the Proposed Car Tax Rule
The new car tax rule will impose a charge of approximately 3 pence per mile on EV drivers. This fee is in addition to the Vehicle Excise Duty (VED) that EVs started paying last year. Plug-in hybrids will face a lower rate of about 1.5 pence per mile.
Industry Concerns
Experts have voiced concerns that this tax could hinder EV adoption. Shahzad, a commentator on the issue, stated that the government’s timing seems premature. Currently, there are nearly 2 million electric vehicles registered in the UK, which represents less than 5% of the total 42 million vehicles on the road.
- 3 pence per mile for EVs starting in 2028
- 1.5 pence per mile for plug-in hybrids
- Less than 5% of total vehicles are electric
Future Implications and Predictions
The Office for Budget Responsibility has issued warnings about the potential negative impact of this policy. Experts predict that up to 100,000 fewer EV sales could occur over the next five years if the costs become prohibitive. Additionally, it’s estimated that by 2030, one in five car drivers may not pay any fuel duty at all.
Despite the push for paid mileage, the government argues that all drivers should contribute to road maintenance and further investments in infrastructure. Proposed methods for tracking annual mileage include self-reporting by taxpayers, verified through MOT test centres.
As the transition to electric vehicles continues, the balance between generating government revenue and promoting sustainable transport remains a critical challenge. The move to impose new taxes on EV users may feel “completely backwards” to many, especially when considering the current landscape of vehicle ownership and usage.
