Taxing road users by mile

[Sonic1234]

Why are we charging for road mileage potentially accrued outside the UK in this situation, and why are we charging all miles the same?

What percentage of miles on UK cars are accrued outside the UK? I expect it's insignificant.

Also encourages people to spend their money domestically.

But both raise a fundamental question - what is the purpose of the change?

And how you sell it to the public. The purpose will be to raise money for Government, it always is. The public-facing purpose will be to encourage responsible car use, discourage unnecessary journeys, promote modal shift, active travel etc........

It's why I've always thought the Government actually wants you to give up on the train and drive.

 

[AlterEgo]

What percentage of miles on UK cars are accrued outside the UK? I expect it's insignificant.

Oh it'll only apply to UK registered cars?

 

[35B]

What percentage of miles on UK cars are accrued outside the UK? I expect it's insignificant.

Also encourages people to spend their money domestically.


And how you sell it to the public. The purpose will be to raise money for Government, it always is. The public-facing purpose will be to encourage responsible car use, discourage unnecessary journeys, promote modal shift, active travel etc........

It's why I've always thought the Government actually wants you to give up on the train and drive.

Absolutely. Which is why, from a pro-rail perspective, the more complicated ideas are a threat to rail.

In the political battle over road taxation, there will be a significant lobby trying to get a reduction in taxation on cars. A simple switch like the levy will annoy the hell out of them, because it will leave relatively few niggles for them to fight over. Go down the road of remote monitoring, whether GPS or roadside camera based, and they have radicalisation nodes at every mast, every black box, every spending decision. They will use that to make taxing car use harder and harder, and their political allies will make damn sure that other taxes can't rise to fill the gap. That will leave less in the Treasury's pocket to fund rail, and make the cost advantage of road much greater (yes, and they will then moan like hell about the quality of roads regardless of hypocrisy).

== Doublepost prevention - post automatically merged: 29 Jul 2026 ==

Oh it'll only apply to UK registered cars?

The same question applies there, too. Measured as part of the overall total, how much use do they make of British roads?

 

[JamesT]

The same question applies there, too. Measured as part of the overall total, how much use do they make of British roads?

https://assets.publishing.service.g...7fbfbd2/foreign-vehicles-methodology-note.pdf reckons it's about 0.5% of road traffic is foreign registered, though with some large caveats around sample sizes. It links through to a page with tables.

 

[The exile]

Sure but it will disproportionately affect people in rural areas and sparsely populated ones who need vehicles the most and who have the least alternative, which seems very unfair.

And also who, in general, are the lowest “offenders” in terms of urban pollution and congestion.

 

[Peter Sarf]

Why are we charging for road mileage potentially accrued outside the UK in this situation, and why are we charging all miles the same? GPS or camera controlled tolls are a much better way to manage this surely.

No more so than the congestion charge or ULEZ.

The congestion charge and ULEZ technology only currently covers a small part of the country. Rolling that out to the entire UK would mean the whole country getting fitted with the congestion charge and ULEZ technology. Thats a lot of money (and political goodwill) spent.

Sure but it will disproportionately affect people in rural areas and sparsely populated ones who need vehicles the most and who have the least alternative, which seems very unfair.

That is no different to the fact these people in rural areas are at a disadvantage anyway with the existing fuel duty. If you want to spend money and political goodwill fixing that with a more complicated scheme then good luck, especially as it benefits only a minority. Sadly for rural people but thats the way it is.

....................

But both raise a fundamental question - what is the purpose of the change? If you are just trying to replace a government income stream, then it's about how you transition between two regimes. The current direction of policy seems to focus on that, and is quick and dirty, in line with the relatively low cost to run fuel duty regime (and also some other taxes, notably Air Passenger Duty).

If you're trying to restructure how car usage is taxed, then the sort of ideas you mention start to apply. That's more demanding, will cost a lot of money, and carries significant political risks.

Agreed. It is a choice over a simple un-contentious to many way of charging that is no less fair than the existing fuel duty. OR a more complex but fairer method that is hard to sell as an idea to the majority of voters.

---

I lost the quote but someone mentioned people who have accrued mileage abroad. Well it might not be entirely fair but the alternative is that they pay per mile in the country they visit at the rate that country charges. Just complicated for no real benefit. And we will not be collecting mileage charges from the visitors to the UK. This probably applies most, in both directions, to road freight (lorries).

Of course we could join a Europe wide scheme to make it simpler and fairer.......
Referendum anybody !.

 

[AlterEgo]

That is no different to the fact these people in rural areas are at a disadvantage anyway with the existing fuel duty. If you want to spend money and political goodwill fixing that with a more complicated scheme then good luck, especially as it benefits only a minority. Sadly for rural people but thats the way it is.

What is the point of tying taxation to plain mileage then if you don't propose on charging differently for different miles? Fuel duty does basically the same thing.

 

[Peter Sarf]

What is the point of tying taxation to plain mileage then if you don't propose on charging differently for different miles? Fuel duty does basically the same thing.

Fuel duty will not work with EVs. If fuel duty could reliably be applied to electricity used to charge EVs then an alternative to fuel duty would be pointless. But its not easy.

The alternative beyond simple mileage based charging means a bells and whistles road pricing method that costs a lot to set up, probably involves adapting many peoples cars and causes a lot of political bad will amongst the voting population.

Now the government could offer an alternative to mileage based charging for people prepared to pay for and have a black box (or suchlike) installed in their car.

How about a three tier setup :-

1. Fuel duty on petrol for dinosaurs - people like me.
2. Mileage based charging for EVs.
3. Full road pricing for EV owners prepared to adopt a "fairer and cheaper" regime.

I would love a fairer overall and more complicated road pricing strategy that addresses environmental concerns BUT it just is not going to happen.
I have come to the conclusion that is a political hot potato that alienates a large proportion of the voting population and costs money. So is a non starter.

 

[35B]

What is the point of tying taxation to plain mileage then if you don't propose on charging differently for different miles? Fuel duty does basically the same thing.

Because the Treasury is losing a source of tax income that it needs to replace. The "do nothing" option is not to retain fuel duty, but to see fuel duty dwindle to near zero.

Going back to brass tacks, fuel duty is hard to avoid and cheap to collect. It does not distinguish between type of road used, but otherwise penalises those who drive high mileages and/or inefficient cars due to the amount of fuel they use.

A per mile charge largely replicates that, whether flat rate or banded by car type/efficiency. A tolling mechanism is fundamentally different in nature, and demands far more resources to collect efficiently. It also risks perverse outcomes - if different road types are tolled differently (presumably higher tolls for higher grade roads), then you risk diverting traffic away from those roads. We already see that with satnavs diverting traffic to roads that aren't designed to cope - this will further boost those algorithms. Keep it flat rate in a car, and you maintain the current general pattern* that drivers focus on time and convenience, rather than trip cost.

An example. When I drive from Grantham to Lincoln, I normally go A1/A46. It's fast, and it's convenient, but it's also longer than either A607 or the back road through Marston and Brant Broughton. Put tolls into the equation, where my journey cost is not just about distance but also rate per mile, and those other routes stop being a nice country drive and start to become alternatives. That undermines the purpose of the trunk road network.

* - we will all know someone (or even be someone) who calculates the cost of each trip to the penny, and decides purely economically. But that is the exception rather than the rule, and it is the general behaviour of the population as a whole that will matter.

 

[renegademaster]

If you have a nationwide "weight tax" or purchase tax to cover most of the fuel duty shortfall and then to achieve the goal of discouraging car use, but not doing it bluntly and punish people with no alternative, make it easier for local councils to introduce congestion charges and make a national framework that they can use to collect payment and install the cameras

 

[Peter Sarf]

If you have a nationwide "weight tax" or purchase tax to cover most of the fuel duty shortfall and then to achieve the goal of discouraging car use, but not doing it bluntly and punish people with no alternative, make it easier for local councils to introduce congestion charges and make a national framework that they can use to collect payment and install the cameras

That is going to be VERY unpopular with a lot of voters.

If you are going to the trouble of installing more or 100% coverage of cameras then might as well drop the purchase tax. It is my belief that the initiall purchase tax or indeed road tax actually encourages unnecessary use. After all once someone has paid for that then they might as well make as much use of the car as possible.

Putting all the cost on the actual use of the car will discourage use of the car where it can be avoided.

I think anything more sophisticated than a mileage tax with tiers depending on the type of car is going to be too cumbersome and too unpopular.
I suggest the tiers as a way of encouraging smaller, lighter less energy using cars. The parallel with fuel tax is larger heaver cars use more fuel so effectively gave the state more money.

 

[35B]

That is going to be VERY unpopular with a lot of voters.

If you are going to the trouble of installing more or 100% coverage of cameras then might as well drop the purchase tax. It is my belief that the initiall purchase tax or indeed road tax actually encourages unnecessary use. After all once someone has paid for that then they might as well make as much use of the car as possible.

Putting all the cost on the actual use of the car will discourage use of the car where it can be avoided.

I think anything more sophisticated than a mileage tax with tiers depending on the type of car is going to be too cumbersome and too unpopular.
I suggest the tiers as a way of encouraging smaller, lighter less energy using cars. The parallel with fuel tax is larger heaver cars use more fuel so effectively gave the state more money.

I don't think road tax or purchase tax make a blind bit of difference to usage - when owning a car, costs like those are cost of ownership rather than spread over use in most peoples' minds.

 

[Peter Sarf]

I don't think road tax or purchase tax make a blind bit of difference to usage - when owning a car, costs like those are cost of ownership rather than spread over use in most peoples' minds.

Thats right. So I think a cost per mile is what might focus a car users mind.

How effective that has been with the cost of fuel for ICEs I do not know. It probably needs to be so high as a mileage cost that people will be up in arms about it.

I for one feel hard done by as I only very lightly use a car (four month gaps) so road tax is unfair on me. But I am probably an edge case.

 

[35B]

Thats right. So I think a cost per mile is what might focus a car users mind.

How effective that has been with the cost of fuel for ICEs I do not know. It probably needs to be so high as a mileage cost that people will be up in arms about it.

I for one feel hard done by as I only very lightly use a car (four month gaps) so road tax is unfair on me. But I am probably an edge case.

The politics will be tricky, as a) fuel duty is unpopular, b) is not directly paid by drivers, and c) imposing a charge on EV users will upset those who are used to not paying any consumption based taxes on their use of their EVs. My view is also that the rate needs to be set to generate approximately the same level of tax for the Treasury as the current fuel duties, not be used to drive specific driver behaviour

 

[JamesT]

Thats right. So I think a cost per mile is what might focus a car users mind.

How effective that has been with the cost of fuel for ICEs I do not know. It probably needs to be so high as a mileage cost that people will be up in arms about it.

I for one feel hard done by as I only very lightly use a car (four month gaps) so road tax is unfair on me. But I am probably an edge case.

Some very handwavey numbers. At 158p/litre, tax (fuel duty+VAT) is roughly half the cost of the fuel. Apparently 36mpg is average for a petrol car in the UK, which gives 20p/mile. So if you were to completely replace it with a pay per mile charge, you'd be looking around 10p/mile.

 

[Peter Sarf]

The politics will be tricky, as a) fuel duty is unpopular, b) is not directly paid by drivers, and c) imposing a charge on EV users will upset those who are used to not paying any consumption based taxes on their use of their EVs. My view is also that the rate needs to be set to generate approximately the same level of tax for the Treasury as the current fuel duties, not be used to drive specific driver behaviour

I would say setting a road usage rate that matches what is currently charged via fuel tax roughly per vehicle is the most that can be got away with. Even that will be tricky as foolishly the government decided to let EVs use the roads tax free to start with - very naive in my opinion - they have made a rod for their own backs.

Any replacement tax for fuel tax is going to stick out like a sore thumb. At least the advantage of a mileage based tax is that that it could incentivise less use. Its a conundrum if a tax is obvious then it will influence people behaviour.

I would expect that road tax / VED will stay. Never seen a government remove a tax.

BUT they have to replace the revenue lost from fuel tax.

== Doublepost prevention - post automatically merged: 29 Jul 2026 ==

Some very handwavey numbers. At 158p/litre, tax (fuel duty+VAT) is roughly half the cost of the fuel. Apparently 36mpg is average for a petrol car in the UK, which gives 20p/mile. So if you were to completely replace it with a pay per mile charge, you'd be looking around 10p/mile.

The more I think about it a mileage based charge is going to be very very unpopular. Even though 10p a mile is fair and equivalent to what is currently hidden in fuel tax it is going to be a real problem to get away with. The problem is made even worse because all those EV owners are going to get a shock.

It really is a nightmare waiting to happen.

Be easier to tax all electricity at a subtly higher rate, with subtle increments. But what has the government done ? - reduced it instead.

 

[bangor-toad]

What percentage of miles on UK cars are accrued outside the UK? I expect it's insignificant.

Hi,
That depends on where you are...
For some of us in Northern Ireland this can be about 50%. Whilst that's obviously not a significant aggregate mileage across the whole of the UK car usage it is a large level on a personal basis.

Whilst Northern Ireland is part of the the UK, I do wonder if this is something that will be quietly not implemented for Northern Ireland registered cars as it could come into the "too difficult" bucket once a few legal challenges are made...

In the meantime we'll just continue paying more per kWh for our electricity than in England and 10p per liter less for petrol and diesel.
Cheers!
Mr Toad

 

[GRALISTAIR]

This is a difficult subject and one that I am sure will have to be adjusted over the years. A massive Jag and a tine Vauxhall Corsa should not have to pay the same per mile tax.

 

[Peter Sarf]

Hi,
That depends on where you are...
For some of us in Northern Ireland this can be about 50%. Whilst that's obviously not a significant aggregate mileage across the whole of the UK car usage it is a large level on a personal basis.

Whilst Northern Ireland is part of the the UK, I do wonder if this is something that will be quietly not implemented for Northern Ireland registered cars as it could come into the "too difficult" bucket once a few legal challenges are made...

In the meantime we'll just continue paying more per kWh for our electricity than in England and 10p per liter less for petrol and diesel.
Cheers!
Mr Toad

So there is going to be a lot of miles driven in the Republic of Ireland. BUT this is not necessarily a problem if the charges on the two sides of the border are similar. It means all of your mileage will be to the benefit of the UK but the flip side is liles driven by a owner from the oter side of the border will be paying into the Republic's coffers.

This only becomes a problem if the road charging regime either side of the border is vastly different. I worst case would be if Northern Ireland goes with pay per mile but the Republic goes for a tax on electricity. A Northern Iralend operator would therefore be paying twice !.

As it is an easily crossed border there will be a lot of differences.

Sods law says the UK government and the EU will be incapable of coming up with a replacement for fuel tax that is consistent between them.

This is a difficult subject and one that I am sure will have to be adjusted over the years. A massive Jag and a tine Vauxhall Corsa should not have to pay the same per mile tax.

I agree different types of vehicle should not have to pay the same amunt per mile. I think that can be catered for with tax tiers so the mileage rate varies depending on vehicle weight (and emissions of course).

BUT again - people will be comparing what they pay per mile with what friends and acquaintances pay per mile. It is not like fuel tax where the amount of fuel varies but the tax rate does not. In deed almost no ICE owner/operator will be aware of the fuel tax, they will only be aware of the miles per gallon.

 

[PeterC]

People keep mentioning congestion and low emissions charges. The trouble is that these are municipal rather than national taxes.

With ppm the one "unfairness" that I see is that I can alter how much it costs per mile with fuel duty by changing my driving style. I can also use less petrol on a bypass that on the direct route through a town centre.

 

[martin butler]

People keep mentioning congestion and low emissions charges. The trouble is that these are municipal rather than national taxes.

With ppm the one "unfairness" that I see is that I can alter how much it costs per mile with fuel duty by changing my driving style. I can also use less petrol on a bypass that on the direct route through a town centre.

Will a pay as you drive scheme be likely to be introduced at the same time as fuel duty is being levied on Petrol, and Diesel?
If so, that don't sound fair, because some drivers are paying twice,

that's why I think the fairest way has to be that somehow, people who drive battery powered cars, need to pay an equivalent surcharge every time they charge the vehicle, just as petrol and Diesel owners do with fuel duty and it's got to be the fairest way, even if its by putting vat on electric charging?

 

[Mawkie]

that's why I think the fairest way has to be that somehow, people who drive battery powered cars, need to pay an equivalent surcharge every time they charge the vehicle, just as petrol and Diesel owners do with fuel duty and it's got to be the fairest way, even if its by putting vat on electric charging?

These discussions always go full circle in the end. After 170 posts we arrived back at VAT on charging, but how does a government discern what proportion of home charging is allocated to vehicle charging? Especially on so-called granny charging. Why should I pay more VAT on my electricity when I don't even charge a car at home?

If it comes in (and it will definitely have to in some form) the easiest way will be a simple annual check at the MOT. Most cars since 2016 have had some kind of in-built SIM for emergency calls (eCall) and most newer cars have telemetry which is uploaded to the manufacturer's servers. If I was the government, I would offer a discounted PPM price if the driver offered access to real time mileage instead of annual check, but I'm not much of a conspiracy theorist.

For older cars, or those that don't have this system, the rise in insurance black boxes has illustrated just how easy and simple telematics is - it's literally plug and play.

For the reasons I stated earlier up-thread, I would get rid of the traditional 'road tax' altogether, and completely move to PPM (I'm not a fan of energy standing charges either). The costs of driving should be evident at the point of use, and an annual charge regardless of use makes me drive more, not less, as the costs have already been paid.

 

[Krokodil]

If so, that don't sound fair, because some drivers are paying twice,

Life isn't fair. If we have to be unfair to someone, then it's better that it be the polluters.

 

[Peter Sarf]

Life isn't fair. If we have to be unfair to someone, then it's better that it be the polluters.

I think the main issue is what people think is fair.

I would go for the simple pay per mile with different rates depending on vehicle weight and emissions. On the face of it fair BUT....

But a large majority of people (both EV and ICE) will resent having a discrete "tax"/charge to pay even if fuel tax is dropped.
Remember, apart from road tax, the fuel tax is invisible as it is lost in the price of petrol.

Its a political hot potato I fear.

In which case I suppose it is easier just to increase the tax on electricity regardless of its use and keep fuel tax.
How much would the tax on electricity need to rise to cover the lost fuel tax revenue as car use switches from ICE to EV ?.
I know it is not fair BUT is it more palatable politically.

Fuel tax on petrol has been a nice little earner that motorists rarely perceived.

 

[edwin_m]

In which case I suppose it is easier just to increase the tax on electricity regardless of its use and keep fuel tax.
How much would the tax on electricity need to rise to cover the lost fuel tax revenue as car use switches from ICE to EV ?.
I know it is not fair BUT is it more palatable politically.

That would have the unfortunate side-effect of increasing the price of electricity relative to gas, making it even more difficult to persuade people to switch from boilers to heat pumps.

Fuel tax on petrol has been a nice little earner that motorists rarely perceived.

The major protests in 2000 and various lesser ones since then suggest otherwise.

 

[dcbwhaley]

In which case I suppose it is easier just to increase the tax on electricity regardless of its use and keep fuel tax.
How much would the tax on electricity need to rise to cover the lost fuel tax revenue as car use switches from ICE to EV ?.
I know it is not fair BUT is it more palatable politically.

Seeing that cutting VAT on electricity was one of ABs first actions to ease life for poorer people I doubt that he would consider that.

 

[Peter Sarf]

That would have the unfortunate side-effect of increasing the price of electricity relative to gas, making it even more difficult to persuade people to switch from boilers to heat pumps.

I wonder how big an effect ?.
Hell put up the tax on gas (no not gasoline) as well.

This is the problem with fuel tax for cars, it might be subtle but if it drives everyone to other modes - non ICE then the money is lost !.

The major protests in 2000 and various lesser ones since then suggest otherwise.

I fear those protest will be chicken feed compared to being confronted with a far more obvious pay per mile - even if it is fair and fairly equivalent to fuel tax. Its just too obvious.

 

[Harpers Tate]

that's why I think the fairest way has to be that somehow, people who drive battery powered cars, need to pay an equivalent surcharge every time they charge the vehicle, just as petrol and Diesel owners do with fuel duty and it's got to be the fairest way, even if its by putting vat on electric charging?

I suspect that you may possibly be thinking through this with a "fill it up at a filling station" mindset (with apologies if you aren't) which, if it were universally the case, would indeed be a suitable way to go.

But as I and others have attempted to point out - much EV charging is done at home and - again - in these cases it's far, far too easy to make any such charging unmeasurable/undetectable and therefore not separately taxable from other domestic use. And what percentage of VAT would you apply to those who charge for absolutely nothing from their solar array? You can suggest a million percent if you like - it's still zero. And if I use a mixture of solar and grid power - how do you propose to reliably measure the proportions?

There really, honestly, isn't any good way to tax all EV "fuel"; you could only realistically tax roadside charging, which in my case is likely to be practically never. Now whilst I might be entirely happy with such a scheme (from a cost-to-me POV) I wouldn't consider it fair.

 

[Peter Sarf]

Seeing that cutting VAT on electricity was one of ABs first actions to ease life for poorer people I doubt that he would consider that.

Yes AB has burnt a bridge there. Would be very radical to increase fuel tax on electricity regardless of use. But if coupled with a higher tax on gas it would make more energy efficiency schemes workable.

Instead he has made it easier to afford a scarce resource tus ensuring demand for it will not go down.

Instead we reduce tax on energy and give people a winter fuel payment. The winter fuel payment does nothing to reduce the demand for something in short supply - energy. Instead it means people can afford to keep using the scarce resource that is energy thus putting the price up (supply and demand). A forward thinking government would have spent the money on home insulation. The problem is that is a long term strategy where the benefits are not immediate but once the money is spent its benefits are there almost forever. But instead we have what is a short term vote grabbing fix with no long term goal. To do it properly however means long term using less energy thus gaining less tax revenue from it - just like losing ICE fuel tax.

It is a two edged sword.

 

[edwin_m]

Yes AB has burnt a bridge there. Would be very radical to increase fuel tax on electricity regardless of use. But if coupled with a higher tax on gas it would make more energy efficiency schemes workable.

Instead he has made it easier to afford a scarce resource tus ensuring demand for it will not go down.

Instead we reduce tax on energy and give people a winter fuel payment. The winter fuel payment does nothing to reduce the demand for something in short supply - energy. Instead it means people can afford to keep using the scarce resource that is energy thus putting the price up (supply and demand). A forward thinking government would have spent the money on home insulation. The problem is that is a long term strategy where the benefits are not immediate but once the money is spent its benefits are there almost forever. But instead we have what is a short term vote grabbing fix with no long term goal. To do it properly however means long term using less energy thus gaining less tax revenue from it - just like losing ICE fuel tax.

It is a two edged sword.

I agree with you on insulation but the winter fuel payment is simply extra cash, and apart from the name there's no reason to spend it on fuel. So if people choose to use energy more efficiently they will have the cash to spend on something else. Has anyone worked out how the per-mile charge for an EV compares with the saving from the VAT cut on electricity if that EV is charged at home?