Taxed by the Mile

[markjay]

The time that takes is a limitation on the potential mileage the car can cover and thus the supposed damage it can do to the roads.

But the EV can be charged overnight... when most cars are parked-up anyway.

 

[markjay]

Also, I don't think that the damage to the roads should be a key factor here, as said it will have an adverse impact on drivers in rural areas. Instead, I think that road pricing should be based on supply-and-denand: this will help regulate congestion and reduce pollution.

 

[Bellow]

But the EV can be charged overnight... when most cars are parked-up anyway.

A quick Google and I'm told that a 3 pin plug can only charge at 2.3kW. Twelve hours charging could only replenish a 27.6kW.hr battery. Aren't most batteries upwards of 50kW.hr?

 

[flying haggis]

A quick Google and I'm told that a 3 pin plug can only charge at 2.3kW. Twelve hours charging could only replenish a 27.6kW.hr battery. Aren't most batteries upwards of 50kW.hr?

I don't like the thought of a 3 pin plug supplying 2.3Kkw + night after night for hours on end........

 

[markjay]

A quick Google and I'm told that a 3 pin plug can only charge at 2.3kW. Twelve hours charging could only replenish a 27.6kW.hr battery. Aren't most batteries upwards of 50kW.hr?

True, but batteries are typically just topped-up, not charged from zero to full. My EV has a 72kWh battery, I usually charge it from 50% to 80%, which on a 5.5kW street charger takes around 6 hours. Anyone needing a full charge every day would be well advised to buy a petrol car for now, and wait for EV technology to further evolve before taking the plunge.

 

[Bellow]

True, but batteries are typically just topped-up, not charged from zero to full.

Only possible if low mileage - otherwise a fuller charge would be required.

My EV has a 72kWh battery, I usually charge it from 50% to 80%, which on a 5.5kW street charger takes around 6 hours. Anyone needing a full charge every day would be well advised to buy a petrol car for now, and wait for EV technology to further evolve before taking the plunge.

A 30% charge enabling not even one third of full range would take 14 hours with a 3-pin. So few are going to go this route and those that do will cover such low mileage there really isn't an argument against levying the tax at the point of recharging as the scope for abuse is minimal.

 

[markjay]

...A 30% charge enabling not even one third of full range would take 14 hours with a 3-pin. So few are going to go this route and those that do will cover such low mileage there really isn't an argument against levying the tax at the point of recharging as the scope for abuse is minimal.

I think that you just have no idea how crafty some people are....

 

[Bellow]

I think that you just have no idea how crafty some people are....

Crafty doesn't defeat the laws of physics. 2.3kW is 2.3 kW. And who in their right mind would shell out upwards of £50k on an EV and be so restricted in its use?

 

[markjay]

Crafty doesn't defeat the laws of physics. 2.3kW is 2.3 kW. And who in their right mind would shell out upwards of £50k on an EV and be so restricted in its use?

Firstly, I only charge my EV once a week, I could easily break it down to two top-ups per week. I think that most city dwellers don't do very high annual mileage anyway.

Then, it all depends on the level of taxation. If electricity for EVs will be taxed in the same way as petrol and diesel oil are taxed (around 60% from the price at the pump is tax), you can rest assured that people will charge their EVs at 2.3kW.

 

[Bellow]

Firstly, I only charge my EV once a week, I could easily break it down to two top-ups per week. I think that most city dwellers don't do very high annual mileage anyway.

City dwellers - with extension leads lying across pavements slung from windows how many floors up?

Then, it all depends on the level of taxation. If electricity for EVs will be taxed in the same way as petrol and diesel oil are taxed (around 60% from the price at the pump is tax), you can rest assured that people will charge at 2.3kW.

Only viable with a garage or off-street parking. The kind of people who have the wherewithal to have that have the wherewithal to pay the tax and enjoy faster charging and greater vehicle utilisation. Don't forget, this is Britain - where 'what will the neighbours think?' influences every decision.

 

[markjay]

City dwellers - with extension leads lying across pavements slung from windows how many floors up?

Only viable with a garage or off-street parking. The kind of people who have the wherewithal to have that have the wherewithal to pay the tax and enjoy faster charging and greater vehicle utilisation. Don't forget, this is Britain - where 'what will the neighbours think?' influences every decision.

Can I run a cable to charge an electric car across the pavement?

Read our guide to charging an EV if you don't have off-street parking, including liability for personal injury claims, the safety implications of using extension cables and how it impacts insurance.

www.thisismoney.co.uk

 

[PXW]

Long post coming up.

I think I’ve expressed my views on this before. To my mind, the first question is not “how shall we tax car usage/how do we implement road pricing?” but rather “why should we tax car usage?. And “because we always have” is a poor technical answer.

Taxes have two main purposes.

One is to raise money for government to spend on our general well-being (“schools and hospitals” - but we all know that also includes armed services, local authorities, cost of government, sovereign grant and whatever else raises your personal blood pressure…). Whatever the politicians tell us, the funds are not “hypothecated” (dedicated to a single purpose) but all taxes contribute to all spending.

The other is to manage behaviour - typical examples are sin taxes on tobacco and alcohol, or an income tax structure designed to incentivise people to work (unlike the current one!), or a corporate tax regime designed to incentivise investment.

So - back to road pricing. The “we need to replace the money from fuel duty” is a silly argument. Of course we do, but there is no compelling reason why that has to come from road pricing. The incremental systems/process cost of replacing the fuel duty revenue with additional income tax, say, or VAT is tiny compared with the cost of introducing a new per mile road pricing system, with all the inevitable carve-outs and exemptions. From a pure fund raising perspective it simply does not make sense.

So what about the second situation? What are the reasons for disincentivising vehicle use, that would merit using a tax to modify behaviour? There may well be some - for example, control of air quality in big cities, or control of congestion in heavily used areas (but please can we be clear about which is which - my EV gets a 100% discount on the London Congestion charge, when it still takes up precisely the same space as one car. It also gets exemption from low emission zones - that does make sense because the local pollution for an EV is significantly lower).

But if we decide there are such good reasons, we then need to consider what tools are the most efficient to achieve that goal. A brand new country wide road pricing system will arguably penalise those who we want to keep using their cars - for example those in remote rural locations where as a country we want them to be able to travel to access key services, spend their money etc.

I’ve no doubt that we will end up with road pricing, despite my arguments above. It does seem to me that the thinking is somewhat back to front on this though, and I don’t think as a country we are asking the right questions.

 

[markjay]

....A brand new country wide road pricing system will arguably penalise those who we want to keep using their cars - for example those in remote rural locations where as a country we want them to be able to travel to access key services, spend their money etc....

Only if road pricing is implemented as a flat cost-per-mile across the UK, but there's no reason why this would be the case.

As I posted before, the cost per mile should be variable and depend on several factors, such as the type of vehicle, the location and time of travel, congestion in the area at the time of travel, etc.

So someone driving on rural roads at night will pay next to nothing, while someone driving through the city centre at rush hour will pay the most.

In short, the taxation will be used to manage congestion, or 'shape behaviour' as you call it.

 

[markjay]

...I think I’ve expressed my views on this before. To my mind, the first question is not “how shall we tax car usage/how do we implement road pricing?” but rather “why should we tax car usage?. And “because we always have” is a poor technical answer....

This is a valid question that applies to all forms of taxation, including Income Tax, National Insurance, Corporate Tax, Capital Gains Tax, Inheritance Tax, Insurance Tax, VAT, various Duties, etc, etc, the list is long.

Each of the above can be argued as unfair.

But the underlying issue here is that currently in the UK there's no real right-wing conservative party with 'proper' right-wing economic and fiscal ideology that says that freedom and prosperity come through small government and low taxation. Liz Truss came close, but her reign was short-lived. Even in the US, by the way, the last true right-wing president was probably Ronald Reagan (who famously said that people shouldn't come to the government for answers, because government isn't the answer, it's the problem).

So for now.... we have taxes upon taxes, with all political parties competing for votes by promising ever-more public services and social services and other spending plans, which will obviously be paid for by more taxation or more borrowing or both.

 

[Dippo]

Only if road pricing is implemented as a flat cost-per-mile across the UK, but there's no reason why this would be the case.

As I posted before, the cost per mile should be variable and depend on several factors, such as the type of vehicle, the location and time of travel, congestion in the area at the time of travel, etc.

So someone driving on rural roads at night will pay next to nothing, while someone driving through the city centre at rush hour will pay the most.

In short, the taxation will be used to manage congestion, or 'shape behaviour' as you call it.

I often drive on the M25 around midnight. It's frequently reduced to one lane for roadworks which may or may not be actually taking place. This has the effect of causing tailbacks and queues at midnight, even though the closed lanes are not being worked on. Your 'pricing according to congestion at the time' would mean that I would have to pay extra for the privilege of being stuck in a jam at midnight caused by the road being closed for roadworks which might or might not take place sometime that night? Please don't tell me they would be sensible about it; at 1500 on a sunny 20 degree afternoon the overhead warning signs still warn of fog which may have been there in the early morning, but certainly cleared many hours ago.

 

[MikeInWimbledon]

Taxation on domestic electricity for EV charging is an enormous issue. People go well out of their way to avoid tax, often spending ridiculous amounts of time and effort to save small amounts.

Look at the nearly five million who are now technically "self-employed" to give NI and income tax the swerve. Who, by doing so, then usually miss out on the pensions and employment benefits our wise regulators and politicians have built into formal employment.

Put in taxes on charging a vehicle at home, in a factory, or in an office, and all kinds of workarounds will be created.

 

[ALFAitalia]

I think that without trackers on each individual car that technically paying by the mile would be just about impossible. Easy to fit that in all new EVs.......but pretty much impossible in all the other cars without massive expense. And before you say they will all be EV soon....no they won't. Current predictions are saying that EVs will only account for about 25% of UK cars by the time the ban on new ICE cars comes into effect in 2030.

 

[190]

It seems to me it will be difficult and relative to present arrangements for collecting IC fuel tax, very expensive to collect a fuel tax from EV users. Which is why it's all the more puzzling that they have held off so long from applying tax of any description to EV's.

Not only are EV's still paying no tax but there is a perverse outcome for general energy prices in the rollout of EV's.

Under the rules of the market devised after privatisation, electricity generators are all paid the same price at the same time, no matter how much it is costing them to supply electricity. This price is set by the price charged by the most expensive producer – a system called marginal cost pricing.

With EV's increasing demand for electricity and net zero driving a lack of core generating capacity, marginal cost pricing is affectively increasing the price of all of the electricity used in our homes and factories. The result in 2022 was we in the UK paid the 3rd highest price for electricity in the whole world. Doesn't sound like a smart way to run a competitive economy to me. And we haven't hardly started yet on the governments plan to have everything run on electricity. I conclude that not only is the taxation of EV's a shambles but so is the whole energy policy.

 

[markjay]

I think that without trackers on each individual car that technically paying by the mile would be just about impossible. Easy to fit that in all new EVs.......but pretty much impossible in all the other cars without massive expense. And before you say they will all be EV soon....no they won't. Current predictions are saying that EVs will only account for about 25% of UK cars by the time the ban on new ICE cars comes into effect in 2030.

Both the London Congestion Charge and the London ULEZ are ANPR-based. As is the Dartford crossing, and I'm sure many other toll roads across the UK. Not to mention speed cameras, parking lots, etc. Why wouldn't it work for per-mile charging?

 

[markjay]

It seems to me it will be difficult and relative to present arrangements for collecting IC fuel tax, very expensive to collect a fuel tax from EV users. Which is why it's all the more puzzling that they have held off so long from applying tax of any description to EV's.

Not only are EV's still paying no tax but there is a perverse outcome for general energy prices in the rollout of EV's.

Under the rules of the market devised after privatisation, electricity generators are all paid the same price at the same time, no matter how much it is costing them to supply electricity. This price is set by the price charged by the most expensive producer – a system called marginal cost pricing.

With EV's increasing demand for electricity and net zero driving a lack of core generating capacity, marginal cost pricing is affectively increasing the price of all of the electricity used in our homes and factories. The result in 2022 was we in the UK paid the 3rd highest price for electricity in the whole world. Doesn't sound like a smart way to run a competitive economy to me. And we haven't hardly started yet on the governments plan to have everything run on electricity. I conclude that not only is the taxation of EV's a shambles but so is the whole energy policy.

I agree, and I'm puzzled as to why my EV attracts so many tax exemptions. It is exempt from the London Congestion Charge, for example, in spite of the fact that it causes just as much congestion as an ICE car. However, my understanding is that the EV tax exemptions are coming to an end, with the BIK slowly rising and the zero VED disappearing as well.