Off-Topic 2017 VED tax ?

Discussion in 'Off-Topic Chat' started by vincemince, Saturday 11th Jul, 2015.

  1. vincemince Top Contributor ★ ★ ★ ★ ☆

    Any thoughts . Given the budget changes in VED how do people feel about them : see tables below

    Apart from raising as much tax as possible I fail to see the logic involved in the way VED is constructed. If ever there was a need for tax reform this is it. For me VED should be based on how much you use the roads or per mile and to discourage pollution.

    Under the current system you could pay top rate £505 for 10000 miles pa use producing 2550000 g co2 @ 20mpg
    while your next door neighbour could pay £20 for 30000 miles pa use producing 3300000 g co2 @ 30 MPG
    Not forgetting that per mile the top band car would only use 20 miles compared to 30 miles for the same petrol tax paid
    So basically fuel duty frozen but VED to go up in two years time for NEW vehicles and some big hits at the top end on new registration for first year only

    Current vehicles tax bands stay the same

    At least we get two years notice but I guess some manufacturers will be annoyed especially with the premium tax based on £40000
    Why £40000 price tag ? Have to think about this one !



    Budget 2015: how it affects UK motorists and what the Premium Car Tax means by CAR Magazine

    July Budget 2015 at-a-glance: how it affects motorists

    Road tax overhauledVehicle excise duty will be radically changed to keep pace with the falling CO2 emissions of modern cars. Osborne claimed that over three quarters of new cars would pay no VED at all in their first year if the current system continued by 2017 as cars continued to clean up. His new system changes all that. The first year's tax for new vehicles registered after April 2017 will still be directly linked to CO2 emissions, but in subsequent years there will be just three rates: zero-emissions (free), standard (a flat rate of £140 applying to 95% of cars on the roads today) and premium (a supplement of £310 a year for cars over £40,000 list price new). The changes apply only to new vehicles registered after 2017: all existing cars on the roads will pay at today's rate, typically an average of £166.

    Electric cars remain tax-freeElectric vehicles won't pay any road tax at all, giving them a distinct advantage over petrol and diesel models. The Government is keen to support EVs and make Britain a hotbed of electric car tech.

    Premium car tax introducedBut while electric cars benefit, premium cars will suffer: the Government has spelled out a new premium car tax for new vehicles with list prices over £40,000 registered after April 2017. They will be clobbered by an additional £310 VED charge every year, and this will be based on price not emissions after the first year. This will surely spell the end of hybrid Range Rovers and the like dodging VED.
    taxtable.
    Current VED table
    Petrol car (TC48) and diesel car (TC49)

    BandCO2 emission (g/km)12 months rate6 months rate
    AUp to 100£0.00Not available
    B101-110£20.00Not available
    C111-120£30.00Not available
    D121-130£110.00£60.50
    E131-140£130.00£71.50
    F141-150£145.00£79.75
    G151-165£180.00£99.00
    H166-175£205.00£112.75
    I176-185£225.00£123.75
    J186-200£265.00£145.75
    K*201-225£290.00£159.50
    L226-255£490.00£269.50
    MOver 255£505.00£277.75
    *Includes cars with a CO2 figure over 225g/km but were registered before 23 March 2006.



     

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  2. Ichiban Founder Staff Team

    England CJ Leeds
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    The chancellor has figured out cars are getting lower VED year on year as the co2 is reducing so I think it fairer system. 140 carpet bomb the entire system is a very good idea.
     
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  3. vincemince Top Contributor ★ ★ ★ ★ ☆

    :money: :money: :money:
    Currently top band is £505
    2017 £2000 first year
    £310 first five years if over £40000 list price
    £140 std rate

    Does this mean over the first five years
    2000 + (310 x 5) + (140 x 5) = 4250
    4250 over five years = 850 a year that's a big jump from 505 a year I.e. Just under 70% increase (69.3%). :Aghast: :Aghast: :Aghast:

    Are these figures correct ? Have I misunderstood ?
    The first year rate looks like pseudo VAT
    I would be interested to see if this has increased the annual VED take and if so by how much ? :money: :nosey: :dodgydeal:
     
  4. ArcticFire-Account Closed Banned Getting Started

    Scotland Graham Scotland
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    Could the £40k+ list price premium be circumvented by manufacturers reducing the list price and making more things as options?

    The ved changes will be nice for people in ten years time wanting to buy a used big engine gas guzzler as all the ved hits will have been suffered already.
     
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  5. vincemince Top Contributor ★ ★ ★ ★ ☆

    Out of interest ;
    House of Commons library briefing paper. Vehicle Ecxise Duty
    http://researchbriefings.files.parliament.uk/documents/SN01482/SN01482.pdf

    Interesting to note that in November 1995 VED was raised to £140

    The Treasury raised £5.9 billion from VED in 2014-15; it expects this to fall in the short term but to increase to £6.3 billion by 2020-21. This is in contrast to the estimates in the March 2015 Budget, which envisaged receipts from VED falling to £5.1 billion by 2019-20.


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    Last edited: Tuesday 14th Jul, 2015
  6. ArcticFire-Account Closed Banned Getting Started

    Scotland Graham Scotland
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    Is there anywhere which says how much of that actually went into the roads?
     
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  7. vincemince Top Contributor ★ ★ ★ ★ ☆

    @ArcticFire Not looked properly but this gives some indication for the future ( not the past )

    Spending £ 3billion each year (fig from below doc. )
    Minister urges construction industry to prepare for £24 billion road investment - Press releases - GOV.UK

    while taking in £ 5.9 billion 2014-15 (fig from doc in previous post #5 http://researchbriefings.files.parliament.uk/documents/SN01482/SN01482.pdf. )

    If that's the case then about half is spent on roads but would need to check other sources to verify . This gives a general sense of the proportion of VED that is not solely used for roads . The VED revenues were historically often used for other areas than roads and this was formally legislated for in 1936 Finance Act , I believe . However from 2020-21 it's supposed to be used solely for roads .

    Minister urges construction industry to prepare for £24 billion road investment - Press releases - GOV.UK

    Roads Minister Robert Goodwill has today (10 February 2014) called on Britain’s road building companies to get ready for a massive increase in work ahead of the biggest investment in the road network since the 1970s.
    The government is tripling funding on the road network over the next 8 years with more than £24 billion to be spent on upgrading and improving the network until 2021. By the end of the next parliament, the government will be spending £3 billion each year on improvements and maintenance for the strategic network alone. This locked-in funding commitment will support nearly 30,000 new jobs across the construction sector and at the same time deliver a safer, more sustainable road network that is fit for the 21st century and beyond.


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  8. vincemince Top Contributor ★ ★ ★ ★ ☆

    Just to add some more info,

    UK spent £ 7.7 bn and received £ 58bn in taxes in 2011-12 (see more detail below about these taxes )

    The trouble with assessment of road investment and where the money comes from is explored in more detail here and it does become a little complicated. Put simply UK has not invested heavily in roads compared to the revenue it gets from them .

    Road User Alliance | Infrastructure Investments | Road Users Alliance


    UK Road Spending vs. Road Revenue

    Year: 2011-2012
    (£billions spending / revenue)


    graph-2.1.2.


    Source: UK PIA 2012, DVLA 2012, SMMT 2012, HMRC 2012, AA 2012, DFT 2012


    UK Road User Spending and Government Expenditure
    Year: 2011-2012
    (£billions spending / revenue)


    Taxes Collected from Road UsersBillions
    Total Taxes£58.0
    Fuel duty£26.9
    VAT on Fuel£9.9
    Vehicle Excise Duty£6.0
    VAT on Car Sales£8.5
    Company Car Tax£3.7
    Insurance Premium Tax£2.9
    GB Road User Value Added to the EconomyBillions
    Total Road User Value Added to Economy£119.8
    GB spending on cars registered for first time£36.6
    Running and standing costs for all licensed cars
    (excluding depreciation, capital costs, and fuel)
    £52.8
    Fuel costs for all vehicles (excluding duty and VAT)£30.4
    Central Government Budget for RoadsBillions
    Total Government Spending£7.7
    Network Improvements£4.5
    Maintenance£3.2