Nov 17th Budget - Tax impact for EVs

[Deep purple]

The tax levied on the average medium sized ICE car per year on its running costs is nearly £1000. For an EV charging at home it is less than £100.
If you were the Chancellor what would you do on Nov 17th?

 

[Hairyfool]

Out of roughly 35 million cars on the road only around 0.5 million are BEV. So even if the Chancellor tries to establish parity the actual revenue benefit is going to be small vs the fallout with the "green" press and lobbyists.

 

[tsedge]

Out of roughly 35 million cars on the road only around 0.5 million are BEV. So even if the Chancellor tries to establish parity the actual revenue benefit is going to be small vs the fallout with the "green" press and lobbyists.

The rumours are that whatever they announce with EV car tax, it will not start until 2025.

 

[smokie]

I think they'd run into trouble if they introduced a new tax, especially on a supposedly green product, at a time of quite severe hardship for many.

 

[Archev]

I think they'd run into trouble if they introduced a new tax, especially on a supposedly green product, at a time of quite severe hardship for many.

Do we know yet who’s on the roster as Chancer (lor) for that week ??

 

[Hairyfool]

Amongst the figures that are thrown around whenever these are discussed within the treasury are the cost/loss vs benefits.

I am in no way in favour of it but as an example take the idea of the ending of the highest rate tax band. The actual cost to the treasury was miniscule in terms of the overall tax revenue because the numbers affected were less than 1% of tax payers and it only applies to their earnings over the threshold anyway. If, as the theory was, it encouraged them to return/stay and employ more people bumping up tax revenue way more than the losses then it is an overall benefit to the country. They employ the likes of drivers, secretaries, cook, houskeepers, gardeners etc. all paying tax in this country if domiciled in this country

The subject was far more emotive than the issue it represents which is always a problem when it comes to taxation.

 

[smokie]

That's the media for you

 

[tsedge]

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This is a link to a specific article on this, not sure why it has come up as "subscribe to read", I was able to read without subscribing.

 

[Alb]

Couldn't read it either.

 

[tsedge]

Oh dear. Well, the gist of it is that a tax on EVs will be introduced from the 2025-26 tax year, starting small and then growing with the goal to be able to replace the revenue lost as people switch to EVs en masse by 2035.

 

[Alb]

You can't attach any certainty to tax policy beyond the life of the current government. Even that is pushing it with the current lot in power!

 

[Shrink Proof]

The actual cost to the treasury was miniscule in terms of the overall tax revenue because the numbers affected were less than 1% of tax payers and it only applies to their earnings over the threshold anyway. If, as the theory was, it encouraged them to return/stay and employ more people bumping up tax revenue way more than the losses then it is an overall benefit to the country. They employ the likes of drivers, secretaries, cook, houskeepers, gardeners etc. all paying tax in this country if domiciled in this country.

Ah yes, trickle down economics. The idea that if we subsidise a rich man's slap up meal at the Savoy we get the chance to lick his plate afterwards.

 

[Spinynorman]

Probably stick a ‘green levy’ on car insurance too. If the prices start to come up to the ICE levels, then there’s no point in buying an EV - unless saving the planet (a bit) is his high on your altruistic agenda…
Personally, I don’t earn enough now to be ‘altruistic’ about my choice of car. It’s like energy prices - if gas is cheaper, then I cook with gas…

 

[AK OK]

Ah yes, trickle down economics. The idea that if we subsidise a rich man's slap up meal at the Savoy we get the chance to lick his plate afterwards.

It will keep you alive - no?

 

[LongRangeDave]

If they introduce road tax I expect benefit in kind rates for EVs will go up as well. A relatively easy way to raise some extra cash.

 

[Lguk]

Unless they're planning a complete vehicle tax overhaul, which will take significant time to go through parliamentary process. Any new taxes will only apply to newly registered vehicles, as has happened over the last few changes.

Personally I thought the idea of everyone paying the same, and it being a first registration/first 3 years higher cost for specific types of vehicle that fall outside the direction of travel (currently polluting vehicles) worked well and was easily understandable.

The ice vehicle tax works on a cost per mile and efficiency basis rather well, huge v8 you'll buy more petrol per mile than an ecoboost fiesta and pay more tax for being inefficient, if you travel 15k miles a year vs someone travelling 5k, you'll pay 3 times the amount of fuel tax. Then everyone pays road fund licence to access the roads. Essentially setting a minimum. How you translate that to EV without discouraging the switch is the tricky part.

 

[smokie]

I can't recall which site it was but there was a surprising amount of glee in the comments under an article which talked about possible vehicle tax and fuel tax for EVs. And people gloating over the mpg they get from their diesels etc. Is it the politics of envy at work I wonder, alongside not caring for the future of the planet?

 

[Lguk]

I suspect any overhaul that sees EV pay a similar tax level to current ICE pricing. (for example cost per mile equiv to an average mpg vehicle pays in fuel tax, plus road fund licence) will also see ICE taxation increased to ensure people switch over. I noted that Diesel is back over £1.90/L in my local area.

Not everyone that switches to EV is doing so from an altruistic viewpoint, and as the government pushes that particular direction, financial carrots and sticks will be used to ensure the mainstream makes the switch for the greater good.

 

[Hairyfool]

Ah yes, trickle down economics. The idea that if we subsidise a rich man's slap up meal at the Savoy we get the chance to lick his plate afterwards.

Yes but for the rich man to have a slap-up meal at the Savoy he also has to get there, somebody cooks it, somebody provides the ingredients, washes up after and so on.

It is a bit demeaning when collectively class them as "lick his plate", I would rather say "get money out of his fat wallet and into my empty one" economics. However you look at it that is how capitalist economy works. I'll bet President Xi has more money in his than the farmer who grows his rice has.

 

[Macadoodle]

What's the likelihood of the 'free lunch' for EV road tax coming to an end thurs ? Rumour is it will, wonder if Hunt will make it retrospective or from April 23