Millions of motorists across the UK are bracing for significant changes to vehicle taxation as the Labour government prepares its Autumn Budget. Chancellor Rachel Reeves is expected to unveil a new system that will particularly impact owners of electric and hybrid vehicles.
Details of the Proposed Tax Changes
The Treasury is planning to introduce a pay-per-mile charge of 3p for electric vehicle owners, according to reports from The Telegraph. This move aims to create a fairer system as traditional fuel duty revenues decline with the shift away from petrol and diesel vehicles.
Chancellor Rachel Reeves will deliver the Budget on Wednesday, November 26, with the new measures potentially taking effect shortly after. The Times has indicated that while van drivers will be spared these charges, plug-in hybrid car owners face a particularly heavy burden.
Double Tax Impact on Hybrid Vehicles
Owners of plug-in hybrid electric vehicles (PHEVs) could find themselves facing what critics are calling a double taxation situation. These drivers would be required to pay both the new 3p per mile charge and existing fuel duties when using petrol or diesel.
While PHEV owners are expected to receive a discounted rate on the pay-per-mile scheme, the combination of both taxes has raised concerns about the financial impact on drivers who have invested in transitional technology.
Government Position and Public Reaction
A Labour Party government spokesperson defended the proposed changes, stating: "Fuel duty covers petrol and diesel, but there's no equivalent for electric vehicles. We want a fairer system for all drivers whilst backing the transition to electric vehicles."
The government has highlighted its £4 billion investment in support for electric vehicles, including grants that can reduce upfront costs by up to £3,750 per eligible vehicle.
However, the proposals have generated concern among motorists. One driver expressed worries about privacy and control, commenting: "It's big brother again... Big Brother will have control over your driving and how much it's going to cost you. The days of the freedom of the road has long gone!"
The government maintains that it will continue to look at support measures to make electric vehicle ownership more convenient and affordable while ensuring the tax system fairly funds roads, infrastructure and public services.
