What would happen if you had to pay car tax based on your mileage for the year? This is what could happen under a new pay-per-mile car tax scheme being talked about in the UK. And it could save older drivers some cash. Let us know more about this idea and how it could benefit some drivers.

What is the Pay-Per-Mile Car Tax?

A pay-per-mile car tax means that the more miles you drive, the more you pay in taxes. Therefore, the less you drive, the less you pay. This is being considered because a lot of people today use electric cars, and by using electric cars, they do not spend as much money on fuel. The government, by virtue of this fact, loses money on fuel taxes.

Why it could be good news for older drivers

A tax expert at a firm called RIFT, Bradley Post, explained that with regard to older drivers, this new tax might prove very good. “Drivers who don’t use their cars a lot will make a saving with this new tax,” he said. Often, older drivers do not drive as much as younger ones, so they might just end up paying less tax compared to younger drivers.

Helping Different Groups of People

This new tax would certainly relieve people who do not use their cars regularly. For example, people living in a city with good public transport may not drive much. They save some amount related to the car tax by paying less car tax. Moreover, older people driving less could see their car expenses go down.

Need for the New Tax

At the moment, central government makes billions from fuel duty. But as electric car sales rise, people will be filling up on petrol less, fewer tins of fuel will mean less tax for the Treasury. That shortfall could be plugged by this new pay-per-mile tax. A gap of £25 billion or so is opening because people are using less fuel.

What About Older Drivers?

An interesting fact, even though many older drivers could benefit: in a National Travel Survey study, drivers over 70 years old drive about 1,000 miles more yearly than drivers under 20. That essentially means that not all of the older drivers will end up saving money, as they could pay more if they are high-mileage drivers.

The Big Picture

At the moment, however, the pay-per-mile car tax is still just an idea. It does show, however, the sort of thinking within government about new ways to get tax money as more and more people switch to electric cars. The extra tax could save some money, notably for those who are not driving that much.

Questions to Think About

Would you mind having a tax on mileage clocked?
Do you think people driving less pay less in tax, and is that fair?
How do you think this new tax is going to affect your family or friends who drive?

Summary

A new pay-per-mile car tax could save money for older drivers and those who don’t drive much. The idea is being considered as the government looks to make up lost fuel tax money when more people use electric cars. In principle, this might be good news for some using the new tax, but again, it seems those using their cars the most may fall into the trap of spending more.