ABD Outlines Case For Scrapping Of 'Car Possession Tax' (VED)
uty (also known as V
emand) is a tax on ownership of a car. Until recently it has been a fairly insignificant proportion of the overall tax paid by drivers 1
. However in this year's budget it was proposed to ramp up the charges to extortionate levels for many drivers regardless of mileage, usage or driving style.
So, why do we need VED? As a tax for usage of the road it fails dismally. You pay the same whether you do 10 miles or 100,000 miles a year. As a 'green' tax it fails too for the same obvious reasons.
Until recently it was a useful annual check that the vehicle was MOT'd and insured, a function made redundant since most police traffic vehicles now have number plate checking cameras that instantly check MOT and insurance against a national database, these are backed up by roadside ANPR cameras with similar capability. The complicated system of registering vehicles stored off road (SORN) to prevent cars being driven without insurance and MOT is also now made redundant by ANPR cameras Although it failed dismally in its aim anyway, owners of unused cars still have to go through this pointless (and costly to administer) declaration even though they would soon be picked up if driven on the road.
A previous argument for VED was that car users in remote rural areas would be unfairly penalised if all taxation was on fuel, so a fixed VED spread the tax load to low mileage city users who had a choice. However, the government have put fuel tax up anyway and refused to allow a reduced rate in the Western Isles 2
, so they clearly don't care. In addition the argument no longer applies now the VED is banded rather than fixed, so it is doubly unfair on low mileage rural drivers who whilst they might be able to manage with a small car to do the shopping, in reality need a 4x4 to use on the farm or to cope with remote roads in severe weather.
The biggest argument against VED however is the hugely wasteful administration cost. We have a perfect taxation system in fuel tax which taxes those who use the roads and/or produce the most pollution either through their choice of vehicle or their driving habits the hardest. It positively encourages efficient driving and road use without complicated administration. Scrapping of VED would enable low mileage drivers such as many elderly drivers to continue running a car at reasonable cost and would end the unfair punishment of those who keep a weekend car for pleasure which is hardly used. Those who use the roads more or pollute more would pay more.
ABD Spokesman Nigel Humphries said:
“Of course, we can (and will!) argue the separate argument about the overall level of taxation on drivers but the sensible method of collecting such taxes is a no brainer. Taxing car possession is pointless, unfair, extremely costly to administer and certainly not 'green'. Why can our government not see this?”