AutoMotive’s Budget Proposal Unveiled
The UK government has been urged to take a different approach to vehicle taxation in order to support the shift towards cleaner transport. A recent report by New AutoMotive titled ‘Vehicle taxation: the next 25 years’ suggests specific measures that should be taken to ensure fair taxation while promoting the adoption of electric vehicles (EVs).
One of the key recommendations of the report is to restructure road tax based on vehicle efficiency rather than a flat rate. This means that less efficient vehicles would be charged more, while the most efficient EVs would pay the least. This approach aims to ensure that EVs contribute fairly to road tax revenue.
Additionally, the report suggests cutting VAT on public charging to incentivise the use of electric vehicles. This could be funded by gradually increasing road tax and implementing modest increases in fuel duty for internal combustion engine (ICE) vehicles to account for emissions.
Furthermore, New AutoMotive advises against the implementation of pay-per-mile road pricing, citing negative experiences in countries like New Zealand and Iceland where such policies led to a decrease in EV sales. The report highlights the importance of avoiding measures that could hinder the uptake of cleaner vehicles.
Ben Nelmes, CEO of New AutoMotive, emphasised the need for a balanced approach to taxation to support the transition to cleaner transport. He stated, “Electric cars aren’t a sin to be taxed but a boon for the economy. Our recommendations provide a clear path for the Chancellor to avoid detrimental outcomes seen in other countries and prevent an electric car tax penalty scheduled for April 2025.”
Overall, the recommendations put forth by New AutoMotive aim to create a fair and sustainable vehicle taxation system that benefits motorists, the government, and the environment. By implementing these measures, the UK can pave the way for a greener future while ensuring that all drivers contribute equitably to road tax.
Image of report courtesy of New AutoMotive
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