Nov 17th Budget - Tax impact for EVs

I bought an ev because I've always wanted to since seeing teslas and leafs glide silently.

Yes an ev may cause more of a carbon footprint in its initial production, but I'll take driving behind an ev any day over an ice.
Driving through brum im amazed how some pass their mots with the mini coal fires pouring out the exhaust.
Is an ev less "fun" to drive? Imo no.
Who had fun commuting to work through traffic?
Oh they mean that 30 seconds on a Sunday morning on a country road, whilst driving the wife and kids to the local shopping centre :ROFLMAO:
An ev has no soul, is less interactive than an ice.
Because everyone loves multiple clutch presses and gear changes.

I wonder if evs came first then ice was invented with manual gears, only minimal torque unless revving the nuts off it, would anyone buy them?

And breathe....
I read once that lies are believed and spread faster than truths.
This is very apt with ev myths
 
So how would we calculate the actual loss of tax to the government if 50% of new car registrations in 2025 were EVs? The simple answer is I don't really know, but can have a stab at it.

Fuel Duty: Fuel duties are levied on purchases of petrol, diesel and a variety of other fuels. They represent a significant source of revenue for government. In 2022-23, the OED expect fuel duties to raise £26.2 billion. The planned 23 per cent increase in the fuel duty rate in late-March 2023 will add £5.7 billon to receipts next year. That means fuel duty take by the end of 2023 will be somewhere around £32 billion!

VAT: VAT is added to fuel after fuel duty is added. I couldn't find figures for the exact VAT take from fuel as it appears to be one beig pot of "VAT", but as 20% of £32 billion is £6.4 billion it would be reasonable to assume that the VAT take on fuel overall would be somewhere around the £10 billion mark per anum.

VED: "In 2022-23 we estimate that VED will raise £7.2 billion."

Those figures combined are equivalent to roughy £1500 per household in the UK - that's a considerable tax take.

My thoughts:
1) The calculations for how much revenue would actually be lost are somewhat complex, because even if half the new car sales are EVs (assuming that the OBR has it's figures right) in 2025 that only equates to circa 60k vehicles (taking the average of the 2021/2022 new car registration details give us circa 121k cars).
2) At the end of June 2022, there were 33.1 million cars on the road in the UK, 205,770 of which are EVs. Assuming an increase of roughly 60,000 per year until 2025 gies us a number of roughy 386,000 EVs.
3) That 386k is approx. 1.17% of the total number of UK cars.
4) Assuming a combined fuel duty/VAT take on petrol/diesel of £45 billion for 2025 (allowing a little for natural inflation in price), 1.17% of that is just over half a billion (£525.5m) that would need to be found.
5) Giving a total of roughly £1400 per EV that needs to be found to plug the gap.

Now we all know that putting VED up to £1400 per car is just not going to be possible, so that means that there are only two options left in the playbook, taxing the energy used or road pricing.
Taxing the energy is a vexing problem because what is to say that one is not unfairly taxing someone who has batteries installed in their house rather than charging an EV? To a smart meter the power draw curve is remarkably similar.
Adding duty to public charging points? Yes, that's fairly simple, but that unfairly penalises those people who cannot charge at home.
Which brings us to road pricing - much as people don't like the 'Big Brother' side of it, it is fair, and it can also be used as a tool to improve air quality by increasing the charges for certain times of day, or when there is congestion noted. It catches all vehicles, regardless of their fuel and gives a cetralised way of collecting the revenue.

So, them's my thoughts, interesting to see what other think. You chan check the figures etc. via the links below if you like, but the boss is now reeady to go shopping, so time to wrap this up.

Links:
OBR links:
- VED: Vehicle excise duty - Office for Budget Responsibility
- Nov '22 Outlook: https://obr.uk/docs/dlm_uploads/CCS0822661240-002_SECURE_OBR_EFO_November_2022_WEB_ACCESSIBLE.pdf
SMMT: Car Registrations
RAC Foundation: Zap Map:
www.zap-map.com

How many EVs are there in the UK - EV market statistics 2024 - Zapmap

Find out how many electric vehicles there are in the UK, from pure-electric cars to PHEVs and electric vans.
www.zap-map.com www.zap-map.com
 
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JohnInFrance said:
Initial vehicles were battery operated - we have Henry Ford to blame for the prominence of the ICE.
Click to expand...
Batteries at the time were totally inadequate, so it was an easy win for ICE. Steam cars were much more competitive in performance and range but far less convenient to run.
 
Thanks for the detailed post JohnInFrance, I've not thoroughly checked the maths but it looks fairly robust to me.

It's interesting (and if true fairly disgusting) that the press are reporting that the Liz Truss debacle cost the country £30bn, pretty much half of the "black hole". And she had the bare faced cheek to not only not even apologise or make reference to it in her resignation but also she continued to blow her own trumpet. And btw I'm basically (usually) a Tory. Anyway I digress.

So assuming the maths are right, the figures sound a lot but I'm guessing the actual increase per family (should maybe be per car really, but the figures aren't dissimilar) isn't so great. Maybe 10%, or £150, to pluck a figure from the air.

I've always liked the idea of road pricing but, being probably the heaviest users (there are apparently 485k registered HGVs), road hauliers would suffer a massive rise, which would affect everyone by putting up prices of everything. By how much I've no idea but I throw the point in just to show it's not as simple as whacking on a road pricing tax.

And a road pricing policy used to be easy to implement when they could just add an amount to the cost of a gallon of your vehicle's favourite tipple, but in this age of various sources that becomes more difficult . I know the smart motorways will likely have technology to collect detailed data per vehicle but what about off the motorways? You can't really trust mileometers at MOT time, or just have an honesty box on a tax return.

I'm probably missing something really simple but there's my initial thoughts...
 
smokie said:
Thanks for the detailed post JohnInFrance, I've not thoroughly checked the maths but it looks fairly robust to me.

It's interesting (and if true fairly disgusting) that the press are reporting that the Liz Truss debacle cost the country £30bn, pretty much half of the "black hole". And she had the bare faced cheek to not only not even apologise or make reference to it in her resignation but also she continued to blow her own trumpet. And btw I'm basically (usually) a Tory. Anyway I digress.

So assuming the maths are right, the figures sound a lot but I'm guessing the actual increase per family (should maybe be per car really, but the figures aren't dissimilar) isn't so great. Maybe 10%, or £150, to pluck a figure from the air.

I've always liked the idea of road pricing but, being probably the heaviest users (there are apparently 485k registered HGVs), road hauliers would suffer a massive rise, which would affect everyone by putting up prices of everything. By how much I've no idea but I throw the point in just to show it's not as simple as whacking on a road pricing tax.

And a road pricing policy used to be easy to implement when they could just add an amount to the cost of a gallon of your vehicle's favourite tipple, but in this age of various sources that becomes more difficult . I know the smart motorways will likely have technology to collect detailed data per vehicle but what about off the motorways? You can't really trust mileometers at MOT time, or just have an honesty box on a tax return.

I'm probably missing something really simple but there's my initial thoughts...
Click to expand...
It would be easy to charge HGVs and other commercial vehicles a lower rate per mile. However, don’t be surprised if small electric vans then become enormously popular!
 
smokie said:
I've always liked the idea of road pricing but, being probably the heaviest users (there are apparently 485k registered HGVs), road hauliers would suffer a massive rise, which would affect everyone by putting up prices of everything. By how much I've no idea but I throw the point in just to show it's not as simple as whacking on a road pricing tax.
Click to expand...
Agreed - there would have to be a way that was appropriate for them as well, and in a world of road pricing, VED should be killed off stone dead. Commercial hauliers pay huge VED costs already, so there has to be a way the the Road Transport Association and the Government can come up with an 'average' way of doing things - for some prices will go up, for others they will fall. Additionally, it means the foreign lorries, of which there are pleanty, will also have to pay for their use of the roads which they do not currently do - as they enter via any of the ports their details are collated and then when the vehicle goes to leave a check is done and any outstanding payments must be made or the vehicle is impounded until they are (this also works for visiting foreign cars/bikes etc. too).

I know the smart motorways will likely have technology to collect detailed data per vehicle but what about off the motorways? You can't really trust mileometers at MOT time, or just have an honesty box on a tax return.
Click to expand...

There must be a way that it can be done - London for instance has both Congestion Charging and ULEZ charging managed by ANPR cameras, as do other cities I believe. Here in France Paris, Toulouse, Lyon to name but a few have ULEZs again managed by camera, Portugal's toll roads are all barrier-free and managed via cameras. VED compliance in the UK is already managed by the camera system, this could all form part of a road pricing network. The other alternative is the installation of 'black boxes' - a not inconsiderable task to fit 33 plus million of them though, so likely not.

I agree it's all a bit Orwellian, but the UK is already an Orwellian country with more CCTV than anywhere else on the planet**, so something like this must be possible without too much additional work? Perhaps?

** if you have not done so, watch the BBC series Capture - overly dramaticised and certainly not possible today but certainly makes one think ....
 
m4rmite said:
:ROFLMAO:
An ev has no soul, is less interactive than an ice.
Because everyone loves multiple clutch presses and gear changes.

I wonder if evs came first then ice was invented with manual gears, only minimal torque unless revving the nuts off it, would anyone buy them?
Click to expand...
1) First sentence: You're correct
2) Second sentence: That creates more interaction and it's hardly 'hard' pressing a clutch and changing gears lol call me non-lazy, but yesterday I shifted from 1st to 2nd after depressing the clutch, and it wasn't akin to a 16 hour shift in a steelworks. I even managed to take my foot off the brake and lift a handbrake traffic at lights. I confess I didn't find that 'hard' either.
3) Third sentence: Yes.
 
Last edited:
JohnInFrance said:
Nor should you. For some people, cars are merely transport, for others they are more than that, for some it's a passion - either way they all mean different things to different people and we should embrace that.
Click to expand...
That's pretty much what it is.
I'd say about 99% see them as merely transport.
 
mickw said:
I'm waiting for delivery of an EV, but I also drive a low emission (1 litre engine) ICE which is taxed at £30.

Are they planning to get rid of the tax reduction for low emission ICEs before 2025? If not, I can't see how they could tax EVs at a higher rate than even the "greenest" ICE (currently £30)?

In other words are they planning from 2025 to have a single flat rate (currently £185) for all cars regardless of their emissions or engine type or will there still be incentives for greener cars?

Apologies if this topic has already been covered on here, but the thread is too long to trawl through every post...
Click to expand...
Apparently in answer to your third question there will still be incentives for some unless I’m reading this the wrong way according to this document

C2B9B582-7C22-48AE-9131-4AE8757B7D08.jpeg

I’m am so annoyed LOL. about having to pay VED from 2025 on both of our MG EVs , that I spent all day yesterday looking for my FREE Bus Pass which I have never seen for about 2 years, or at least since we got or first EV.
But now if I have read this correctly I am on the look out for a 2011-2016 Nissan before the prices of them also shoots up.
Les
 
Last edited:
Les burrows said:
Apparently in answer to you third question there will still be incentives for some unless I’m reading this the wrong way according to this document

View attachment 12873
I’m am so annoyed LOL. about having to pay VED from 2025 on both of our MG EVs , that I spent all day yesterday looking for my FREE Bus Pass which I have never seen for about 2 years, or at least since we got or first EV.
But now if I have read this correctly I am on the look out for a 2011-2016 Nissan before the prices of them also shoots up.
Les
Click to expand...
Looking for a 6-11 year old EV to try an avoid paying £165 a year? You might find possible repair costs of an older car may make that £165 VED look like a picnic.
 
JohnInFrance said:
So how would we calculate the actual loss of tax to the government if 50% of new car registrations in 2025 were EVs? The simple answer is I don't really know, but can have a stab at it.

Fuel Duty: Fuel duties are levied on purchases of petrol, diesel and a variety of other fuels. They represent a significant source of revenue for government. In 2022-23, the OED expect fuel duties to raise £26.2 billion. The planned 23 per cent increase in the fuel duty rate in late-March 2023 will add £5.7 billon to receipts next year. That means fuel duty take by the end of 2023 will be somewhere around £32 billion!

VAT: VAT is added to fuel after fuel duty is added. I couldn't find figures for the exact VAT take from fuel as it appears to be one beig pot of "VAT", but as 20% of £32 billion is £6.4 billion it would be reasonable to assume that the VAT take on fuel overall would be somewhere around the £10 billion mark per anum.

VED: "In 2022-23 we estimate that VED will raise £7.2 billion."

Those figures combined are equivalent to roughy £1500 per household in the UK - that's a considerable tax take.

My thoughts:
1) The calculations for how much revenue would actually be lost are somewhat complex, because even if half the new car sales are EVs (assuming that the OBR has it's figures right) in 2025 that only equates to circa 60k vehicles (taking the average of the 2021/2022 new car registration details give us circa 121k cars).
2) At the end of June 2022, there were 33.1 million cars on the road in the UK, 205,770 of which are EVs. Assuming an increase of roughly 60,000 per year until 2025 gies us a number of roughy 386,000 EVs.
3) That 386k is approx. 1.17% of the total number of UK cars.
4) Assuming a combined fuel duty/VAT take on petrol/diesel of £45 billion for 2025 (allowing a little for natural inflation in price), 1.17% of that is just over half a billion (£525.5m) that would need to be found.
5) Giving a total of roughly £1400 per EV that needs to be found to plug the gap.

Now we all know that putting VED up to £1400 per car is just not going to be possible, so that means that there are only two options left in the playbook, taxing the energy used or road pricing.
Taxing the energy is a vexing problem because what is to say that one is not unfairly taxing someone who has batteries installed in their house rather than charging an EV? To a smart meter the power draw curve is remarkably similar.
Adding duty to public charging points? Yes, that's fairly simple, but that unfairly penalises those people who cannot charge at home.
Which brings us to road pricing - much as people don't like the 'Big Brother' side of it, it is fair, and it can also be used as a tool to improve air quality by increasing the charges for certain times of day, or when there is congestion noted. It catches all vehicles, regardless of their fuel and gives a cetralised way of collecting the revenue.

So, them's my thoughts, interesting to see what other think. You chan check the figures etc. via the links below if you like, but the boss is now reeady to go shopping, so time to wrap this up.

Links:
OBR links:
- VED: Vehicle excise duty - Office for Budget Responsibility
- Nov '22 Outlook: https://obr.uk/docs/dlm_uploads/CCS0822661240-002_SECURE_OBR_EFO_November_2022_WEB_ACCESSIBLE.pdf
SMMT: Car Registrations
RAC Foundation: Zap Map:
www.zap-map.com

How many EVs are there in the UK - EV market statistics 2024 - Zapmap

Find out how many electric vehicles there are in the UK, from pure-electric cars to PHEVs and electric vans.
www.zap-map.com www.zap-map.com
Click to expand...
very easy to recover the £1400 annual ev tax loss by introducing a 30p/mile ved balancing charge based on a mileage inspection/declaration. no need to bother about source of power used
 
If £165 a year tax is make or break for some people that's surprising as shelling out for an ev in the first place is that much more expensive than an ice. I agree completely with paying the VED.
I think if people genuinely believed that as more and more EV's came onto the road to replace ice cars and government revenue drops that they weren't going to do this were being a bit naive. Also to be fair why should we not pay
 
ianwlk said:
very easy to recover the £1400 annual ev tax loss by introducing a 30p/mile ved balancing charge based on a mileage inspection/declaration. no need to bother about source of power used
Click to expand...
My thoughts exactly, although 30p/mile is somewhat excessive I think, that's £3600 based on 12k/year which is the average mileage.

My initial thoughts would be that something around £0.12 per mile during 'normal'/off-peak times rising on a sliding scale to up to £0.50 per mile for peak time driving or heavily polluted areas. If someone thought about this and made road pricing part of a properly integrated transport policy, then having large park and ride hubs on the outside of heavily trafficed/polluted areas would both save people the price of higher per-mile rates and lower pollution overall as well. I do realise that is a somewhat utopian statement!
 

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