Petrol, diesel and electric drivers could face new ‘weight-based’ car tax rules

Petrol, diesel and electric vehicle owners could be slapped with new car tax charges calculated based on vehicle weight. A new report from the Resolution Foundation explained that new “weight-based” rules could replace the existing standard Vehicle Excise Duty (VED) charges.

Up until now, VED has been mostly calculated based on vehicle emissions, with more polluting vehicles paying more. However, the Treasury is set to lose out on billions of pounds in revenue as more drivers make the switch away from combustion vehicles to electric cars. Experts stress that the time has come to look at alternatives with charges based on vehicle weight among one of the suggestions.

The Resolution Foundation explained weight-based rules could be applied to electric vehicles, linked closely to distance in a sort of pay-per-mile rate.

They said: “VED for EVs sold in future should change to be a function of distance driven and weight. Weight is a useful metric as it is correlated with road damage, noise, tyre and brake pollution, danger to others, reduced front visibility, road footprint, energy use and car value.”

Tied to weight, the Resolution Foundation explained that average EVs of around 1,800kg could be charged 6p per mile to use the road. Lighter electric vehicles weighing just 1,000kg could then be charged proportionally lower at around 3p per mile.

Finally, the heaviest EVs on the road, around or above 2,800kg, would be charged the highest fees of around 9p per mile.

However, combustion models could soon be affected with the Resolution Foundation suggesting that non-EVs should be hit with VED hikes as well. They stressed this could mean reform of the flat £195 charge applied to non-EVs registered after 2017.

The Resolution Foundation added: “To parallel our EV suggestion, both up-front and recurring VED rates for non-EVs sold in future could vary with weight. Weight variation is something called for by the London Assembly, and by other think tanks, and for which there is a range of international experiences – with weight-linked annual charges in New South Wales, the Netherlands and Estonia for example.”

Reacting to the findings of the report, a HM Treasury spokesperson said: “Our balanced approach helps to protect public finances during the transition to electric vehicles. We have introduced Vehicle Excise Duty on Electric Vehicles while providing £1.4bn to boost sales and £650m in grants to cut upfront costs by up to £3,750 per vehicle.”