Fleet owners back calls for new road pricing system

A poll has indicated that the majority of fleet owners are backing a new road pricing system to replace the current road tax scheme.

The poll was taken following the news that MPs are recommending road-user charging through a ‘pay as you drive’ scheme.

According to the report, 55% of fleet decision-makers are backing the changes, with 40% saying they’re against the change, and 5% still being unsure about potential changes.

Why Might The Road Tax System Be Changing? 

The reality is that fuel duty and vehicle excise duty generate £40 billion in tax for the government every year, with the majority of that figure coming from fuel duty.

But with fewer internal combustion engine vehicles on the road, the amount of money generated from fuel duty is dwindling.

And because there are fewer polluting vehicles on the road (and the fact that EVs don’t generate ANY emissions), tax revenue from vehicles is expected to drop significantly in the next few years.

The government is under pressure to meet emissions targets by 2050, and the COP 26 Climate Summit last year saw commitments made to achieve those goals.

There hasn’t been a definitive decision on how a tax shake-up would look for the automotive industry, but a recent report by MPs backed a ‘pay as you drive’ tax, which would generate tax based on how often you drive.

That’s because around half of the price of fuel is taxed, and with petrol costs rising to as much as £1.55 per litre (and above) in recent months, around £0.85 is being taxed.

But because EVs aren’t taxed, and there’s no petrol or diesel fuel to be purchased, tax revenues are on the downturn.

Crucially MPs have suggested that motorists should pay “the same or less” than they currently do, and any scheme could factor in:

• The type of vehicle
• Congestion
• The amount driven
• Support for vulnerable groups such as those with mobility issues, people in remote areas, and those with disability badges

When Can We Expect A Pay As You Drive System To Be Introduced?

We’re a while away from any changes being introduced.

The government are exploring all options and canvassing opinion on a pay as you drive system, especially since the Transport Committee published a report recently that states current road tax revenues will be wiped out by 2050.

Any system would use telematics technology to charge drivers based on distance driven, factoring in the type of vehicle and the time of day too.

This is obviously likely to affect fleets as commercial drivers complete more miles than the average driver, so would be likely to face higher charges.

The good news is the report suggests that the taxation MUST be revenue neutral and assess the impact on fleets, hauliers, and those in rural communities who are least able to adapt to increased driving costs.

What do you think of the potential for a pay as you drive tax system? Let us know in the comments below.