New pay-per-mile car tax means drivers will have to 'rethink' going on holiday

New pay-per-mile car tax bands mean drivers will have to 'rethink' going on holiday
-Credit: (Image: Reach Publishing Services Limited)


New pay-per-mile car tax bands - if implemented by the new Labour Party government - mean families having to rethink going on holiday. Drivers and motorists could be slapped with a new pay-per-mile car tax under Labour, it is feared.

Majid Ismailzada, Marketing Director for the rent-to-own vehicle company G&M Direct Hire warned that the system could make some drivers think twice before getting behind the wheel for long-distance journeys. He explained: "It's clear that many families are concerned about the impact of this new tax.

"With the cost of fuel and other expenses rising, the added burden of a pay-per-mile tax could make long-distance travel over the holidays less appealing for many." Since the Government has yet to confirm that it will introduce a pay-per-mile system of road tax, it is currently unknown how much drivers would be charged.

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Transport experts say higher taxes are needed to reduce congestion as well – with motorists already wasting one billion hours stuck in traffic every year. “Unless we want to lose an awful lot of tax revenue, we’re going to have to move to some way of taxing driving and the obvious way to do that is some kind of road pricing,” says Paul Johnson, director of the Institute for Fiscal Studies and author of Follow the Money, a book about tax and spend policy in the UK.

“My view is that we need to do this relatively quickly. But obviously, that’s politically difficult.” Fuel duty, which currently costs 52.95p per litre of petrol, effectively taxes drivers for the distance they travel already: the more you drive, the more fuel duty you end up paying.

On top of this, petrol car drivers pay VAT on top of fuel duty and vehicle excise duty, also known as “road tax”, experts have said.