Budget 2015 Bad News :-(

SteveTitaniumx said:

From 2017, new cars with a list price of over £40,000 will pay a supplement of £310 per year on top of the standard rate, (£0 for EVs) for five years.
This particular rule will include all-electric luxury cars, like the Tesla Model S, and may also hit the Model X, which have previously been exempt from VED.

I hope by then, Tesla will reduce the price, making it more affordable and attractive if it remains VED free. Then we all should be able to afford one.

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Surely anyone who can afford a £40k car can afford £310 a year? Can't see this really making any difference to anything.

And Model X will almost certainly be more expensive than Model S.

Model 3 should come in well under that limit though...

mgboyes said:

Surely anyone who can afford a £40k car can afford £310 a year? Can't see this really making any difference to anything.

And Model X will almost certainly be more expensive than Model S.

Model 3 should come in well under that limit though...

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On an up note .. all that cash collected will go to improve the roads ... wont it ? :redface:

gdavison said:

On an up note .. all that cash collected will go to improve the roads ... wont it ? :redface:

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Not sure it will. The road tax will go to the roads, but Tesla still will not be subject to road tax. This £310 seems to be an additional premium for owning a nice car and will probably be used to fund central Government.

ohcomeon said:

Not sure it will. The road tax will go to the roads, but Tesla still will not be subject to road tax. This £310 seems to be an additional premium for owning a nice car and will probably be used to fund central Government.

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I think gdavison was joking. VED hasn't been used directly for road funding since 1926.

mgboyes said:

I think gdavison was joking. VED hasn't been used directly for road funding since 1926.

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The VED will go into the Road fund from 2020/21 (ie at the time of the next election

hileyms said:

The VED will go into the Road fund from 2020/21 (ie at the time of the next election

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Bloody hell. Sorry, that had completely passed me by.

What an utterly stupid idea. All the reasons that this was abolished in the 1930s still apply. Still, I expect it will be popular with Daily Mail readers (and add huge amounts of fuel to the "cyclists have no rights because they don't pay road tax" fire).

Hmmm....

Budget 2015: Motorists in expensive cars hit by £450 annual tax to fund new roads - Telegraph

"All petrol cars will be subject to a “standard” flat rate VED charge of £140. The Treasury said this would cover 95 per cent of all cars sold in the UK.
Vehicles worth over £40,000 will attract an additional “premium” VED surcharge of £310 a year - making £450 in total - for the first five years.
Only cars which do not emit any carbon – like electric cars - will be exempt from VED altogether. "

So propper EVs (NOT HYBRIDS THO!!!! :biggrin: sorry) still appear to be fully exempt.

But at least ... " George Osborne, the Chancellor, said all the cash raised from the VED would go into a ringfenced “roads fund”. He told MPs that “every single penny raised in vehicle excise duty in England” will go into the new roads fund to pay for “sustained investment our roads so badly need”."

I thought the £310 was a one off on purchase and the it was £140 per year UNLESS you drive a zero emissions car, in which case its zero as before.

Direct from HMGs website...

"The road tax system will be revised to make it fairer and sustainable. From 2017, there will be a flat rate of £140 for most cars, except in the first year when tax will remain linked to the CO2 emissions that cars produce. Electric cars won’t pay any road tax at all and the most expensive cars will pay more."

Summer Budget 2015: key announcements - News stories - GOV.UK

I can't see how "Electric cars won’t pay any road tax at all" can mean that some EVs will pay some VEL... but all this has been created by someone working for HMG. Perhpas the "the most expensive cars will pay more" superceeds the other bit. Anyone in a position to clarify?

Leaving aside the notion that more affluent EV owners are currently being subsidised (not being contentious but they are), there needs to be an informed discussion about how to tax EV vehicles in the long term and make up for fuel tax lost to the EV revolution. The current situation is unsustainable.

I personally think the surcharge for high value cars is a first step towards this. The only other fair way would to tax power Usage in some way, although this would raise problems with legacy systems. You can't tax electricity more than currently because you cannot separate use, so this would not make up for fuel duty losses.
I think toll roads and a rate based on mileage is unfair, as you have people making long trips to visit sick relatives or commuting to work, and also does not encourage energy efficient systems.

YoungStranger said:

You can't tax electricity more than currently because you cannot separate use, so this would not make up for fuel duty losses.

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All OLEV funded charge points required separate metering, so dual tariffs would theoretically be feasible. Now they've done a typical government funded but "old school tie" business implemented job on this (i.e. the cr@p Polar units) it's unlikely to ever work properly. Besides you can still easily bypass this with a 32A commando and an EVSE anyway..

So in that regard it's unlikely to fly. However all the current BEVs are "connected cars", meaning a backstop implementation could be made by simply interrogating the cars to see how much juice they've taken on board, then feed that back to central billing. Tie the VIN to your MPAN number and it could appear on an extra line on your electricity bill.

Saying that I still think it is unlikely. All new cars are to be fitted with GPS/GSM from October this year under EU law. Whilst right now they are only supposed to activate when the airbags go off, the tech is all on board for recording mileages for pay per mile schemes (or indeed automatic speeding fines), it's just waiting for the lawmakers to extend what is legal (no doubt under the auspices of safety or taxation equality)

mgboyes said:

I think gdavison was joking. VED hasn't been used directly for road funding since 1926.

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I was .. hence the smileys

@ YoungStranger - Well, you kind of are! The implication of your words is that something unfair or underhand is going on. All that actually is going on is that HMG, under pressure to meet its CO2 reduction targets, is encouraging people to buy electric cars by offering a grant. The size of the grant in no way 'levels the playing field' i.e. brings EVs into the same price bracket as equivalent spec ICEVs and so early adopters are still going to be paying a premium to drive an EV - unless they buy a used one, of course. Also, for business use, EVs can make huge financial sense, even allowing for the higher capital cost of a new one.

The current position is absolutely sustainable as very few car owners have swapped to EVs. When EVs make up 10% or more of the car population in the UK than we can have this conversation again but at well less than 1% it would in no way be realistic or finically worthwhile to change the tax system to make EV owners pay car tax. Again, HMG is trying to switch people on to EVs, not turn them off!

Your logic in your last point is utterly baffling as well. The most obviously fairest way to tax vehicle use is on a mileage basis (combined with axle weight, if we are including road repair costs, too). There is not much you can do about visiting sick relatives (but how much long distance traveling is done for this, really?) but if you don't like a long commute - change your job or move. This isn't exactly a new concept! MW

martinwinlow said:

@ YoungStranger - Well, you kind of are! The implication of your words is that something unfair or underhand is going on.

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Don't think I'm implying underhandedness. It's a point of view, and I understand the purposes of the current subsidy. There are certainly a great many bigger things wrong with this country than EV subsidies.

When EVs make up 10% of the car population of the UK then we can have this conversation again

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Why not have this conversation now? The current system cannot continue when there are a million EVs on the road, and therefore it must be unsustainable.

Your logic in your last point is utterly baffling as well. The most obviously fairest way to tax vehicle use is on a mileage basis (combined with axle weight, if we are including road repair costs, too). There is not much you can do about visiting sick relatives (but how much long distance traveling is done for this, really?) but if you don't like a long commute - change your job or move. This isn't exactly a new concept! MW

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A rate per mile is certainly the most convenient to administer, but I prefer a measure of power useage, simply because that would encourage energy efficient vehicle design. For example if the system is extended to ICEs, a Hummer or a Rolls Royce would pay the same rate as a Toyota Aygo, and also people undertaking large mileages Whatever their reasons for travelling, would be doubly penalised, as they are being taxed on both fuel use and road use. Perhaps a flat rate for vehicle tax, or a progressive one based on value of car, would be best after all. But that would have to include EVs. I am thinking that a new system would have to account for both vehicle tax and a substitute for fuel duty, which is effectively a tax on mileage.

I hate the idea of paying per mile... Either the rates would be so low that it would not be worth collecting, or if a significant rate people won't make trips and this will slow the economy, especially for rural and tourist areas and there is a social cost too... People visiting sick or elderly relatives, journeys undertaken for favours etc.

And motorway tolls will just encourage people to drive through towns and on B roads

The general point is, as smac infers, we can't trust HM government (Whatever it's colour) to make the right choice, so a informed discussion (or acrimonious argument��) is needed. My point is generally that EV supporters (and I am one)can't just make a special pleading not to pay tax, as this is not possible politically or economically.

Watch this video to find out how the UK gov. are reforming car tax in the #SummerBudget To me, this implies NO EVs will pay VED regardless of being over 40k. The third lot of writing says it all "Electric cars won't pay any car tax at all"
Twitter Video

smac said:

All OLEV funded charge points required separate metering

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My OLEV subsidised charge point was installed April this and did not require separate metering. That said, there is a SIM card inside the charge point that sends info back. Is that what you meant?

ohcomeon said:

My OLEV subsidised charge point was installed April this and did not require separate metering. That said, there is a SIM card inside the charge point that sends info back. Is that what you meant?

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yes thats the 2nd "metering"

Until we actually see the wording in the Finance Bill there's no way to be sure. Currently lots of people are paraphrasing this point in ways that suggest either that expensive EVs will or won't pay the £310.

The wording in the actual budget says that it applies to cars that have an RRP over £40k, in the first 5 years "in which the standard charge is paid". Feel free to debate whether or not it is possible to "pay" a standard charge of £0