- Fuel duty income set to drop as cars' fuel efficiency increases
- Government needs to plug the gap to avoid revenue shortfall
- Are road tolls the answer? Vote in our poll to let us know
In a recent report it is claimed that there will be a vast reduction in the tax the Government makes from motorists as many move over to more fuel-efficient and alternatively-powered cars.
As Parkers can reveal, this will have a double whammy effect as tax revenue falls dramatically through the government collecting less fuel duty and road tax (VED) revenue.
The RAC Foundation, an independent motoring research charity, warns in its report the solution could come from more toll roads and charging on existing roads, where there is a cost per mile to use the UK's road system.
Another alternative, according to the study, is a 50% hike in fuel duty. However, this is simply not viable since it'll price many transport and haulage firms out of business let alone the private motorist.
Another option is to introduce large hikes in VED (vehicle excise duty) and company car tax.
This got us thinking - what's the best solution for the Government to recoup the required cash? We've laid out a few options below, so vote in our poll or alternatively email us at firstname.lastname@example.org and tell us exactly what you think. We'll put the best answers up on this article.
Top replies so far:
"We should not forget that the government has had a windfall on the back of rising petrol prices, both in terms of duty and VAT.
Would it also not be reasonable to assume that in time the zero rate for VED would gradually disappear as adoption of the technology of electric vehicles and hybrids becomes greater.
Personally I think all of the options you showed are non starters.
All this additional taxation is killing the country and doing nothing to stimulate the economy."
"Electric charging tariff, using a dedicated meter for the car battery charger, easy the goverment puts a tarriff on the usage.
The UK National Grid is already under a tremondous strain to supply electricity to our homes at peak times, this is to the extent where UK industry has electricity Triad periods where the Tariff per unit is considerably more than normal daytime use, as the demand from cooking and domestic use increases at morning and evening peak times.
Electric cars will be ok for town and short journeys, as service and reps vehicles there is along way to go yet.
Safety, we are aware that there is very powerful batteries but there is also a very serious safety aspect to be considered, the particlular example was and electric racing motorcycle was at Silverstone last year unfortunately it caught fire ,the number of fire extinguishers which would have normally put out a petrol motorcycle were all used and yet the fire burned on , apperently it was due to the intensity of the heat that was being generated from the material the batteries were manufactured from."
"The motorist already contributes more than his/her fair share.
None of the options on your poll are acceptable. Instead increase taxes on gambling, alcohol and cigarettes."