The implementation of a pay-per-mile tax system in the UK could potentially cost diesel drivers up to £1,410, according to experts. Diesel car owners are feared to be among the most affected if the Government introduces a new road tax scheme in the upcoming October Budget. The proposed shift from the current Vehicle Excise Duty (VED) to a pay-per-mile system aims to distribute tax contributions more evenly among drivers.
Industry specialists express concerns that diesel vehicle owners could face significant financial implications under a pay-per-mile tax system. Majid Ismailzada, marketing director at GandM Direct Hire, highlighted the potential impact on families, especially with the rising costs of fuel and other expenses. He noted that the added burden of a pay-per-mile tax could make long-distance travel during holidays less affordable for many families.
Currently, road tax charges are based on factors such as engine size, CO2 emissions, and the vehicle’s first registration date. Diesel vehicles, typically larger and more polluting than petrol cars, already incur higher road tax charges. Diesel car owners are required to pay a flat rate of £190 annually from the second year onwards, similar to petrol drivers. However, the introduction of a pay-per-mile tax system could lead to increased costs for diesel drivers.
While the Government has not confirmed the implementation of a pay-per-mile road tax system, speculations suggest a potential fee of 15p per mile driven. According to reports from Vehicle financing firm LeaseLoco, the average diesel car owner in the UK covers around 9,400 miles per year. With the proposed 15p per mile charge, the average diesel driver could face a total annual cost of £1,410.
Some drivers view the potential shift to a pay-per-mile tax system as a possible means to reduce fuel costs. By replacing the current fuel duty rate of 53p per litre with a flat fee covering all vehicle types, petrol and diesel prices could drop below £1 per litre. This could potentially alleviate financial pressure on drivers in terms of fuel expenses.
The debate around the introduction of a pay-per-mile tax system continues, with varying perspectives on its potential impact on drivers and the overall cost of travel. As discussions unfold, motorists await further clarity from the Government on any impending changes to the road tax framework.