Motoring taxation in the United Kingdom

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Motoring taxation in the United Kingdom comes in a variety of forms. The United Kingdom's road system is generally funded through Vehicle excise duty and fuel duty. However there are localised tolls and road pricing schemes in operation. There are proposals for a nation wide road tolling system.

[edit] Fuel duty

Main article: Hydrocarbon oil duty

This is an excise duty or tax added to the price of motor fuel per unit of volume rather than as a percentage of the selling price. Fuel duty was introduced in 1909.

[edit] Vehicle excise duty

Main article: Vehicle excise duty

Nearly all motorised vehicles in the United Kingdom are required to have a vehicle licence on display. The evidence of payment is the tax disc which must be prominently displayed on the vehicle.^[1] Since 1999,^[2] the duty has been levied according to the CO2 emissions, starting with a reduced rate of £50^[2], the scheme was extended into a graded system in 2001,^[3] with the rates being changed in 2006.^[4]

[edit] Road pricing

[edit] Congestion charges

See also: London congestion charge, Manchester congestion charge, and Durham City congestion charge

The UK's first congestion charge was introduced in Durham in 2002.^[5] Since 2003 most vehicles entering parts of Central have been required to pay a daily charge under the London congestion charge. The power to introduce a form of congestion charge was given to any future mayor in the Greater London Authority Act 1999.^[6] Having won the first mayoral election in 2000, Ken Livingstone opted to exercise these powers as promised in his independent manifesto^[7][8] , and carried out a series of consultations with interested parties. The basic scheme was agreed in February 2002, and charging commenced, with some concessions accepted, on 17 February 2003. On introduction, the scheme was the largest ever undertaken by a capital city.^[9] A extension of the zone into West London came into effect on 19 February 2007 despite the majority of residents opposing it in the two consultations.^[10][11] Several London embassies were not paying the charge as they believed it to be a tax, which they are protected from paying under the Vienna Convention.^[12] Although some embassies have agreed to pay the charge,^[13] the US embassy currently owes £1,600,000 (approximately $3,000,000) in fines for non-payment, they do however, pay tolls in Oslo and Singapore. Transport for London argues that the charge is a toll, not a tax.^[14] The latest report from the operators, Transport for London, states that traffic entering the original zone was lower in 2006 than the pre charge levels in 2002, with reduced air pollutants and increased public transport usage.^[15]

The Transport (Scotland) Act 2001 made Scottish road pricing schemes possible, and laid down the condition that all proceeds from such schemes must be spent on transport.^[16] Proposals in Edinburgh for a system of a £2 charge for crossing either outer cordon or inner cordon (or both) were rejected following a public referendum in 2005 by 74% of the votes cast.^[17]

There is currently a proposal for a Manchester congestion charge.^[18] Unlike the current version of the London charge, two cordons will be used, one covering the main area of Manchester and another covering the city centre.^[19]

[edit] London low emission zone

Main article: London low emission zone

Towards the end of 2006, the Mayor of London proposed the introduction of a variable congestion charge. Similarly to vehicle excise duty (VED), it would be based on emissions of carbon dioxide in grams/km. This would reduce or eliminate the charge for small and fuel-efficient vehicles, and increase it to up to £25 a day for large, inefficient vehicles such as SUVs, large saloons and compact MPVs with a Band G VED rating, that is, emissions of > 225 g/km of CO₂. Electric zero-emissions vehicles are already exempt from the charge.^[20][21] At the same time, Transport for London is introducing a Low Emission Zone throughout nearly all of Greater London which will initially come into effect on February 4 2008 covering most of Greater London.^[22] - the largest such zone in the world.^[23] There will be a phased introduction of the scheme from 4 February 2008 through to January 2012. Different vehicles will be affected over time and increasingly tougher emissions standards will apply.^[24] The zone is expected to reduce emissions, so that by 2012 they are 16% lower.^[23] Payment of the LEZ charge is in addition to any congestion charge required.^[25]

[edit] National road pricing

In 2005, the Government published proposals for a UK wide road pricing scheme. This was designed to be revenue neutral with other motoring taxes to be reduced to compensate.^[26] The plans have been extremely controversial with 1.8 million people signing a petition against them.^[27]

[edit] Specific tolls

See also: History of toll roads in the United Kingdom

From the late 18th to the early 21st century tolls were generally only applied to major bridges and tunnels, for example the Dartford Crossing^[28] & Forth Road Bridge.^[29] There were also only two public toll roads (Roydon Road in Stanstead Abbots and College Road in Dulwich) together with another five or so private toll-roads.^[30] The UK's first privately operated motorway opened in 2003. The M6 Toll (originally the Birmingham Northern Relief Road) is designed to relieve the M6 through Birmingham, which is one of the most heavily used roads in the country.^[31]

In 2003 the Dartford Crossing construction debt was paid off. However, the government decided to continue to charge most crossing users to keep congestion levels down.^[32]. As with congestion charging schemes, all proceeds must be used for transport purposes. In one year this money amounted to £60 million.^[33]

[edit] Other fees and charges

Although they do not contain the word "tax" in their titles these may be considered equivalent to taxes in that they contribute to the Public Purse, or in that they are compulsory charges if a motor vehicle is to be legally used on public roads.

[edit] Vehicle first registration fee

Main article: Vehicle first registration fee

The fee charged for the compulsory registration of a motor vehicle which is to be used or kept on public roads.

[edit] MOT test fee

Main article: MOT test

The fee charged for the compulsory annual vehicle inspection required for all motor vehicles over the prescribed age.

[edit] Decriminalised parking enforcement

Main article: Decriminalised parking enforcement

In Local authority (LA) areas which are part of a decriminalised parking enforcement (DPE) scheme, parking regulation, charging and enforcement is the responsibility of the LA. Contravention of regulations in such areas are not criminal offences, and any penalty charges are administered by, and paid to, the LA. Typically the revenue from such schemes is greater than the cost of running the scheme and the surplus goes into the public purse. The surplus revenue is ring-fenced to be used for transport related expenditure unless the Council is judged to be 'excellent' by the Audit Commission, in which case the surplus goes into the Council's general budget (as is the case for Kensington and Chelsea^[34]). In 2005/6 the City of Westminster received GBP 65.4 million in parking revenue for on-street parking^[35].

[edit] References

[edit] See also

• History of toll roads in the United Kingdom