As motoring costs soar, most of the extra cash that we pay goes straight to the Government.

Drivers pay over £1800 a year directly to the Treasury – a rise of over 50% in little more than a decade.

Research just published by the AA shows that motorists pay that much and more in fuel duty, VAT on petrol and diesel, road fund licence and other charges. And worse is to come. Changes in the road tax bands announced in the last Budget will double the cost of road tax on many cars, so that owners of family saloons will pay £400 a year.

At first it looked as if the increases would apply only to new cars – but now it emerges that it will cover vehicles up to seven years old. And, it is predicted, fuel prices will climb to £1.50 per litre in the autumn, brinigng alive fears of the £7 gallon becoming reality.

Motoring groups are already calling for the Government to delay indefinitely the 2p per litre fuel duty increase it has planned for the autumn. There are also demands that the Chancellor cuts the existing duty levels by 2p per litre.

The Government has attempted to justify many motoring tax rises by claiming they will encourage more environmentally-aware behaviour. But official projections forecast that carbon dioxide emissions from motoring will drop by far less than one per cent over the next few years, despite the sharp tax rises.

AA president Edmund King said the Government taxes cars as if they were luxuries where for most of us they are a necessity. ‘Motorists are now taxed at a higher rate than champagne drinkers. The high taxes are now affecting people’s lives and families are having to cut back on other areas of spending to pay for their cars.’

The four taxes on typical drivers £866 Tax on fuel (64p in every £1 of fuel)
£791 VAT (On new car – 17.5%)
£120 Annual tax disc
£34 Tax on insurance policy

Total £1,811 Source: AA analysis of government figures – based on a Vauxhall Astra 1.7, bought new and kept for three years, and filled up with fuel once a fortnight.

Stephen Jury


May 7, 2008

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