Reeves urged to slap drivers with pay-per-mile tax that could raise 20bn

"Motoring taxes are an important part of the tax system but they are also an obvious and significant fiscal risk."

"It would almost certainly put prices up and probably the only way to administer it is to track everyone, which has freedom and privacy implications."

Resolution Foundation urged Chancellor Rachel Reeves to overhaul motoring taxes as fuel duty revenues decline with the shift to electric vehicles. The proposal would introduce an annual levy plus a per-mile charge of 3p–9p, with heavier vehicles paying higher rates to reflect road wear, and could raise up to £20bn annually, potentially covering about two-thirds of a £30bn fiscal gap. Miles could be logged via MOT checks, self-reporting, or telematics. The plan recommends cutting VAT on public charging points and reversing the freeze on fuel duty. Motoring groups warned of higher costs and privacy and tracking concerns. The Treasury declined to comment.

Read at Business Matters