As the ‘painful’ October Budget approaches, older motorists have been warned that they could soon be paying more for their vehicle tax.
Older drivers have been warned that they could soon be paying significantly more for road tax (Image: Getty)
Older drivers have been warned that they may need to pay significantly more for their road tax from next month.
The warning comes after Prime Minister Sir Keir Starmer warned that the upcoming October Budget, the first since the new Government was elected, would be ‘painful’ for many Brits.
Sharing his thoughts on the subject, Howard Cox, founder of the motoring campaign group FairFuelUK, warned that changing to a pay-per-mile system could have a negative impact on the economy.
He explained: “I have credible intelligence that the Treasury has virtually settled, though its internal economic modelling, on increasing Fuel Duty by 10p per litre.
“For nearly 15 years, I have proven that hiking levies on one of the highest-taxed motorist sectors in the world would damage the economy, jobs, inflation, business investment, and freedom of movement. Such a punitive hike will also stifle growth, which may be why his [Sir Keir Starmer’s] speech did not even mention Labour’s central campaign pre-election mantra.”
If the scheme goes ahead, drivers would be charged on how many miles they cover (Image: Getty)
With the Government set to introduce a number of measures to tackle a £22 billion ‘black hole’, many motorists are predicting that the next Budget could introduce a new pay-per-mile tax system.
Compared to the current system, in which tax is based on a vehicle’s engine size or the emissions it produces, drivers would be put into bands relating to how many miles they spend behind the wheel.
Supporters of the system, which would also factor in fuel duty, state that it would make it fairer to tax owners of electric vehicles, which do not produce emissions or need conventional refuelling.
Some have estimated tax bands will begin at £190 per year, significantly more for hatchback owners (Image: Getty)
Whilst it is currently unclear how much drivers would need to pay under a pay-per-mile tax scheme if it goes ahead, some have predicted that motorists will be charged at least £190 per year.
That is the same amount as a vehicle that produces between 131 and 140g/km of carbon dioxide, such as a typical family SUV, under the current system.
Nevertheless, with many older motorists owning smaller and more economical hatchbacks, the predicted figure would be a sharp increase.
Some motoring experts are also predicting that the Government will also increase the fuel duty rate in the upcoming October Budget.
Following a cut of 5p following the Russian invasion of Ukraine in early 2022, the current fuel duty rate is 53p per litre of petrol and diesel.
However, some have predicted that this could raise by 10p, making it around £5 more expensive to fill up a vehicle with a 50-litre fuel tank.