Faced with the decrease in tax revenues derived from taxes paid on petrol and diesel cars, the British government is seeking alternatives to recover from this loss, which could directly penalize the use of electric vehicles. According to the BBC, citing state sources, there have been discussions about the implementation of a variable rate based on the total number of miles driven annually (called “pay-per-mile”), with the British newspaper The Telegraph anticipating rates around 3 pence per mile (approximately €0.034)/mile (1.6 km).
If the measure goes ahead (after undergoing a consultation process), a driver who covers 7,500 miles (about 12,000 km annually) would pay, in that year, £225, which is about €255. To the BBC, a government spokesperson indicated that electric cars do not pay the taxes associated with fossil fuels, unlike their petrol and diesel counterparts, thus necessitating the introduction of “a fairer tax system for all drivers”. Hybrids are not exempt from the new tax, according to the proposal accessed by “The Telegraph”, but they pay lower rates.
According to the same newspaper, the idea is to propose that drivers estimate the miles they will drive in the following year, paying that amount. If they drive less, they would receive “credits.” Otherwise, they would have to pay the outstanding amount.
As the measure seeks to recover lost tax revenues, the British government rejects the idea that it is punishing electric vehicle users, counter-arguing with the incentives and tax benefits they have enjoyed in recent years. However, it is undeniable that there are increasingly more vehicles of this kind on the roads, and taxes related to fuel consumption are showing a declining trend.
In response to the hypothesis, the Society of Motor Manufacturers and Traders (SMMT) stated, through a communiqué, that the proposal represents “a wrong measure at the wrong time. We recognize the need for a new approach to taxes, but at such a crucial stage of the energy transition in the UK, we cannot agree with this possibility. Introducing such a complex and costly regime, which targets precisely the models that manufacturers are struggling to sell, would be a strategic mistake – it would deter consumers and further compromise the industry’s ability to meet the mandatory zero emissions targets”.
