Pay per mile car tax will charge diesel drivers £1,410 for average mileage
Drivers of diesel cars may be among the worst affected if the Government introduces a pay-per-mile tax system. A replacement of the current Vehicle Excise Duty (VED) - better known as road tax - could be introduced in the October Budget.
It aims to make paying taxes fairer for all drivers. But experts said some people may think twice before getting behind the wheel for long-distance journeys.
Majid Ismailzada, of rent-to-own vehicle company G&M Direct Hire, said: "It's clear 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."
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Under the current road tax system, drivers are charged a fee based on either the size of their car's engine or how much carbon dioxide it produces - depending on the year the car was first registered. Diesel cars typically have a bigger engine and are more polluting.
It means owners often have to pay more for road tax in comparison to petrol models, Express reports. This is often the case if the vehicle does not comply with the Real Driving Emissions 2 (RDE2) standards set out by the Government.
From the second year onwards, diesel car owners pay the same flat rate of £190 per year as petrol drivers. But if a pay-per-mile tax system is introduced, this figure may rise. The Government is yet to confirm if it will introduce a pay-per-mile system of road tax. So, it is currently not known how much drivers would be charged.
Some motoring experts have predicted a fee of 15p per mile driven. It is likely the same figure will be applied to all types of vehicles. Owners of diesel cars typically travel further than most. According to the vehicle financing firm LeaseLoco, diesel owners in the UK travel an average of 9,400 miles per year.
As a result, with a 15p per mile fee, the average diesel car driver could face a charge of £1,410. Some motorists are concerned about the impact a pay-per-mile system of taxing vehicles would have, while, others have argued it could cause the cost of fuel to fall.
Since a flat fee would cover all types of cars, there could be a drop fuel duty - the current tax on items like petrol and diesel. Currently, the fuel duty rate stands at 53p per litre of fuel, meaning that, if the fee is dropped in favour of a pay-per-mile road tax, petrol and diesel could cost under £1 per litre once again.