New pay-per-mile car tax bands from October will start at £190 for families

"Families" face paying £190 under new pay-per-mile car tax bands from October. Under the new Labour Party government pay-per-mile car tax could become a thing, replacing vehicle excise duty (VED) with families set to "pay more".

It would mean a starting point of £190, if predictions pay-per-mile would cost families more than VED currently does are to be believed. Andrew Jervis, CEO and founder of motoring specialists at ClickMechanic has recently pointed out “families” were set to be one of the most impacted groups.

Andrew said: “There will undoubtedly also be concerns about the impact on low-income households who rely on their cars for essential travel.” Transport experts say higher taxes are needed to reduce congestion as well – with motorists already wasting one billion hours stuck in traffic every year.

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“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”. Auto Express asked HM Treasury whether it plans to introduce a pay-per-mile road tax scheme, but it declined to comment.

Instead, it said: “We are committed to supporting our automotive sector as we transition to electric vehicles in order to meet our legally binding climate targets.”