“Two-tier” road tax system to drive on motorways

Government officials are considering a new “two-tier” road tax system following a review on transport funding. The scheme would see two rates of vehicle taxation depending on what roads you drive on.

Motorists who generally only pop to the shops or potter around locally, staying off major roads, would pay a lower rate of Vehicle Excise Duty – the official name for road tax – than those who travel mostly on motorways.

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VED is one of the major sources of revenue for transport funding in Britain, but money coming into the Treasury’s coffers has taken a hit as more motorists move towards smaller-engined, more efficient vehicles.

The Office of Budget Responsibility cut its forecast for road tax revenues by £100 million a year from 2014/2015 (down from the current £6 billion a year raised) to reflect the move towards less polluting cars.

It is hoped that a two-tier road tax system could be just one of a number of ideas considered as part of the review to increase tax revenue and therefore centrally earmarked spending on travel – although what prices the two tiers would possibly be set at hasn’t yet been published.

Enforcing the new rules would require all vehicles using the UK motorway network to be monitored, increasing the surveillance culture already deplored by many UK citizens.

Cameras registering your number plate would cross-reference your car’s details against a road tax database – similar to how Automatic Number Plate Recognition and the insurance database are linked now – to determine if a driver has paid the higher rate of tax.

The latest plans haven’t been met with universal praise, as you can imagine. Influential motoring groups have warned government ministers not to adopt a two-tier tax system as it would price drivers off the motorway network, forcing them to take longer journeys, raising concerns for safety and congestion.

AA spokesman, Paul Waters:

“We don’t want a first and second class system on the roads. There would certainly be more traffic. It will lead to slower journeys and more congestion.”

Ministers have not firmly decided upon any plans to reform the VED charges however, and have previously considered a one-off tax for new cars with ‘dirty’ engines, while frugal small cars could receive small subsidies.

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