UK Car Owners Face New Road Taxes To Make Up Lost Tax From Electric Cars

  • Date: 26/06/17
  • The Times

A national system of road tolls should be introduced to meet a £170 billion shortfall in fuel tax over the next 13 years, a think tank has told ministers.

Researchers say that an increase in the number of electric cars will lead to a drop in sales of petrol and diesel, on which tax is paid.

The study by the think tank Policy Exchange, founded by Michael Gove, the environment secretary, said that the government may have underestimated the cost to the Treasury of green cars by £23 billion a year by 2030. The fall in the amount of income from petrol and diesel sales could be as high as £170 billion between now and the end of the next decade.

Researchers said that the scale of losses meant that ministers had to consider other ways to tax drivers or face a big loss of revenue. Ideas include tolls or the use of GPS-style technology in all cars to track the number of miles covered on major roads.

Sadiq Khan, the mayor of London, is considering a pay-per-mile charging system to replace the £11.50 congestion charge. Policy Exchange said that the government had to “consider whether road-user charging might be more effective than fuel taxes”.

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