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Home News Rachel Reeves faces fresh pressure to introduce pay-per-mile driving charges: Report warns of £8BILLION black hole in tax revenues by 2030 due to switch to electric cars

Rachel Reeves faces fresh pressure to introduce pay-per-mile driving charges: Report warns of £8BILLION black hole in tax revenues by 2030 due to switch to electric cars

by Abella
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Rachel Reeves has been warned of a £ 8 billion black hole in the tax revenues of the treasury in five years, while British make the switch to electric cars.

The government's climate advisors accumulated new pressure on the Chancellor to consider alternative taxes to tackle lost vouchers for fuel obligation.

The Climate Change Committee (CCC) found, if the fuel obligation remained at the same pace as today, income would be about a third lower in 2030 compared to 2023.

Fuel obligation is frozen for 15 years in a row, where Mrs. Reeves joins earlier Tory governments to keep the rate the same with her first budget in October last year.

But with work that insists on a ban on the sale of all new gasoline and diesel cars by 2030, the Chancellor is rotated to replace the income that rises fuel obligation.

Mrs. Reeves is encouraged to consider a 'pay-per-mijl' schedule, which means that drivers are charged for every mile they drive, regardless of how they put their cars out of electricity.

Iceland and New Zealand already have a pay-per-mile tax policy for electric vehicles.

Fuel obligation is levied on purchases of gasoline, diesel and a variety of other fuels and currently represents approximately 2 percent of all tax receipts – or £ 850 per household.

Rachel Reeves faces fresh pressure to introduce pay-per-mile driving charges: Report warns of £8BILLION black hole in tax revenues by 2030 due to switch to electric cars

Rachel Reeves has been warned of a £ 8 billion black hole in the tax revenues of the treasury in five years, because British make the switch to electric cars.

The climate advisers of the government accumulated new pressure on the Chancellor to consider alternative taxes to tackle lost coupons for fuel obligation

The climate advisers of the government accumulated new pressure on the Chancellor to consider alternative taxes to tackle lost coupons for fuel obligation

Iceland and New Zealand already have a pay-per-mile tax policy for electric vehicles

Iceland and New Zealand already have a pay-per-mile tax policy for electric vehicles

In 2023, the treasury raised £ 25 billion due to fuel obligation.

But the CCC report said: 'If the fuel obligation remained at the same pace as today, the falling demand for fuel for vehicles would lead to the income in 2030 being about a third than in 2023.

“Without an increase in the fuel obligation rate, we expect that tax receptions of fuel service will fall rapidly, which leads to an income of income for the treasury.”

In his seventh carbon budget, which recommends a limit for the British greenhouse gas emissions between 2038 and 2042, the CCC added that the government should “make the loss of income from fuel obligation”.

It pointed to figures that showed that environmental taxes represented 5 percent of the total British tax receipts in 2023.

This mainly consisted of fuel obligation (47 percent), vehicle excise duty (15 percent), renewable obligations (14 percent), the UK Emissions Trading Scheme (11 percent) and Air passenger Duty (7 percent).

The CCC suggested that in the coming years the government could increase the fuel obligation to encourage British to switch to zero emissions cars and vans.

“Environmental taxes such as CO2 taxes can be used to stimulate households and companies to shift to low-carbon technologies,” the report said.

“This could use extra income in the short term, although if taxes are effective in shifting behavior, this income would not last.”

Last year's mayor elections in London saw Claims that Labor's Sir Sadiq Khan plans a 'pay-per-Mijl' charging plan for London drivers.

Sir Sadiq angry that he is planning to introduce a 'Pay-per-Mijl' schedule as mayor and tied conservative 'lies' and 'Scaremongering'.

But the tories have compiled a file of 17 occasions, a possible 'pay-per-mijl' schedule has been referred by Mr. Khan or senior figures from the town hall during his mayor.

This included Mr. Khan, who in his book Breathe of 'plans to introduce a new, more extensive road user loading system, to introduce that it would be implemented at the end of the decade'.

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