Billions In Motor Tax At Risk From Switch To Electric Cars

The UK needs a new motoring tax for electric cars to avoid “zero revenue” by 2040, MPs have said. The Transport select committee called for a change in the current taxation system to reflect a move towards greener vehicles.

- Zoe Tidman

Pure electric cars are exempt from road tax and their motorists do not have to pay fuel duty either – both of which bring in around £35bn a year, according to the report.

The parliamentary committee said: “Policies to deliver net zero emissions by 2050 are likely to result in zero revenue for the government from motoring taxation by 2040. In addition to generating taxation to fund essential public services, motoring taxation plays a key role in managing congestion by regulating demand to use public roads.”

The MPs added: “If the government fail radically to reform motoring taxation, the UK faces an under-resourced and congested future.”