Who pays for roads?

Motorists pay for roads, yes? No. All tax payers pay for roads, not just motorists. Those who pay income tax and those who pay council tax are the ones who pay for roads, and that’s not just motorists. And anybody who buys anything in Britain also helps to pay for roads because VAT also contributes to the national coffers. Businesses which pay business rates also contribute into the national coffers. And that’s where the money for roads comes from: the consolidated fund, the treasury’s pot of cash that pays for everything. No taxation in the UK is ring-fenced i.e raised by one set of users, and spent on that set of users. But what about ‘road tax’? Clearly, the name says it all, you might think, it’s a tax that pays for roads! Sorry, no, ‘road tax’ doesn’t actually exist. It was abolished in 1937, along with the ‘road fund licence’. It’s now car tax, a UK tax on tailpipe CO2 emissions above 100gm per km*. It’s not now, and never has been, a fee to use roads.

Despite being 75 years past its sell-by date ‘road tax’ is a term that refuses to go to where the other long-gone duties have gone (anybody out there still paying ‘window tax’, abolished 1851)? Anyway, no big deal: ‘road’ and ‘tax’, just two little words. But, for the few minutes it’ll take to read the rest of this short article, let’s imagine ‘road tax’ did exist. If it existed, who would pay it, and who wouldn’t, and why?

1. Drivers who own the Volkswagen Golf 1.6 TDI Bluemotion 105 don’t pay ‘road tax’*:

2. Drivers who own the new Volvo V40 won’t pay ‘road tax’*:

3. More than one million disabled drivers don’t pay ‘road tax’:

4. Children don’t pay ‘road tax’ even though they sometimes have to use roads when walking or cycling to school:

5. Horses don’t pay ‘road tax’, even though they use roads and have most definite tailpipe emissions:

6. Electric vehicles don’t pay ‘road tax’:

7. Tractors don’t pay ‘road tax’:

8. Cyclists don’t pay ‘road tax’:

9. Police cars don’t pay ‘road tax’:

10. The owner of this Rolls Royce does not have to pay ‘road tax’ because it was built before 1973. Motorists with pre-1973 cars don’t pay ‘road tax’:

MORE SUBSIDIES: Band A motorists, disabled drivers, police cars and tractors and so forth are supplied with tax discs showing they pay zero for their ‘road tax’. A Freedom of Information request found that the cost of a tax disc is £1.47 for those bought at a Post Office, and 95p for those bought online.

But let’s keep it simple and say the cost to print, distribute and sell each car tax disc is a quid. There are about 2 million vehicles which don’t pay car tax. That’s two million quid of subsidy to get tax discs to those who don’t pay for them. Hang on, though, the DVLA charges £7 for a replacement tax disc so scrub the quid-per-disc figure, let’s be more realistic and calculate some costs using £5 per disc: those motorists who pay nowt for their car tax are actually subsidised by £10m.

MOBILITY SCOOTERS CAN TRAVEL AT 8MPH & ARE ALLOWED ON DUAL CARRIAGEWAYS: Class 3 invalid carriages are allowed on roads, but are limited to 8mph. According to the DVLA, “You don’t have to pay vehicle tax for any mobility scooter or powered wheelchair, but you still need to register class 3 invalid carriages and display a ‘nil value’ tax disc.” The Department for Transport adds: “You can’t drive on bus lanes, ‘cycle only’ cycle lanes and motorways.” But despite what newspapers may think, mobility scooters can be driven on trunk roads, although the DfT advises: “You should avoid using dual carriageways with a speed limit of over 50mph….If you do use it on a dual carriageway, you must use an amber flashing light for visibility.”


MOTORISTS WHO WANT CYCLISTS TO PAY ‘ROAD TAX’ WOULD PAY MORE ‘ROAD TAX’: Some motorists want cyclists to “get off the road” until they pay ‘road tax’. Do they realise that bicycles, as non-polluting vehicles, would be classified as Band A vehicles and hence would have to pay the same as cars that pay nothing for their ‘road tax’? With 25 million bicycles in ownership, that would be £125m to get each bicycle a valid tax disc. Do motorists really want to pay a lot extra for their car tax to subsidise registration and duty compliance for millions of bicycles?

‘Road tax’ is car tax, a tax on car emissions. Its full and proper name is graduated vehicle excise duty, VED for short. VED, car tax, vehicle tax, whatever you want to call it, is not a fee to use the road. Much more info on this here.

If you’re now confused, thinking ‘if road tax doesn’t exist, what pays for all that tarmac I drive on?’, there’s a simple answer to this: roads are paid for out of general and local taxation. Motorists don’t pay for roads, we all pay for roads. We all have equal right to use those roads.

YOU OWN A CAR, NOT THE ROAD: Payment of ‘road tax’ does not give anyone the right to demand “their” roads are pothole-free, widened to allow greater speed or ‘improved’ in any way. Paying a few hundred quid a year – even if ‘road tax’ did exist – wouldn’t go anywhere near paying a fair proportion of the negative externalities of mass motoring.

THE OLD CHESTNUT: ‘ROAD TAX’ IS A FEE TO USE THE ROAD
Those who believe VED is fee to use roads sometimes use the seemingly-convincing ‘off-road’ argument:

“Doesn’t matter what you call it, VED/car tax/’road tax’, it’s a fee to use the public road because if you don’t pay it, you can’t drive on the public road. For instance, if I elect to use a vehicle off-road, I don’t need to pay VED. If I then choose to use the vehicle on a road, I would have to pay VED. If the vehicle emitted a certain amount of CO2, then yes that VED is currently free, but I would still have to get and display a tax disc in order to use the car on the road.”

But car tax isn’t a fee to use the road, it’s very much a tax on car emissions. Many cars, which use the public road, do not pay any ‘car tax’ because they emit less than 100gms of CO2. If car tax was a fee to use roads, electric cars and low-emissions cars wouldn’t be able to drive on UK roads.

Nor is it true that vehicles that will be driven off-the-public-highway – on private roads – don’t have to pay Vehicle Excise Duty.

VED is charged under section 1 of the Vehicle Excise and Registration Act 1994, as amended, “in respect of every mechanically propelled vehicle that … is used, or kept, on any public road in the United Kingdom”. For England, Wales and Northern Ireland ‘public road’ is defined in section 62(1) of the 1994 Act as “a road which is repairable at the public expense”; for Scotland a public road is defined in section 151 of the Roads (Scotland) Act 1984, as amended, as “a road which a roads authority have a duty to maintain”. However, the DVLA has powers to clamp vehicles that are not on the public road if they are in breach of the VED continuous registration requirements. The explanatory notes to the Vehicle Excise Duty (Immobilisation, Removal and Disposal of Vehicles) (Amendment) Regulations 2008 (SI 2008/2266) state:

The policy intention is to prevent evaders of vehicle excise duty from using off-road areas such as unadopted roads, commons, public car parks or roads maintained by Housing Associations to place themselves beyond the reach of the enforcement authorities.

Farmers can get ‘agricultural use’ exemptions from VED for their Land Rovers, so long as they only travel a mile or so on public highways. And in one special circumstance, cars which emit loads of CO2 can still drive on UK public roads without paying car tax. But only for a short distance. When a SORN (Statutory Off Road Notification) vehicle is going to a pre-arranged MOT test, and the vehicle has valid insurance for the journey, it can be driven on public roads without paying a penny for use of those roads.

Furthermore, if a car is registered in the UK but is never driven in the UK it still has to pay the UK’s Vehicle Excise Duty. So, a UK-bought car driven in France by a UK-born person who’s moved to France permanently, may never drive on UK roads but the car still has to pay VED. This is because it’s a tax on the car, not a fee to use the roads.

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* Other cars which don’t pay ‘road tax’ (apart from all cars, because ‘road tax’ doesn’t exist) include:

Kia Picanto • Fiat 500 • Peugeot 207 • Ford Fiesta 1.6 TDCi 95 Econetic • Vauxhall Corsa 1.3 CDTi ecoFLEX • Audi A1 1.6 TDI • MINI One 1.6 • Citroen DS3 1.6 e-HDi • Volkswagen Polo 1.2 TDI Bluemotion
MINI Cooper D 1.6 • Volvo C30 1.6 DRIVe • Volkswagen Golf 1.6 TDI Bluemotion 105 • Audi A3 1.6 TDI Stop/Start • Volvo V50 1.6 DRIVe

All of these cars are in Vehicle Excise Duty band A because they emit less than 100gms of CO2 per km. According to the Society of Motor Manufacturers and Traders there are currently 65,000 such band A vehicles driving on the roads of the UK. However, because the number of these low emission cars is rising, the Government is losing out on loads of lolly. This can’t go on. At some point the Government will reduce the CO2 threshold. In this ‘road tax to be hiked’ story Auto Express magazine claims that senior motor industry figures predict the Government will reduce the threshold to 85g/km: “Industry insiders suggest only cars emitting 85g/km and below would be exempt in 2016 – excluding Ford’s new 87g/km Fiesta ECOnetic – and that this will be cut annually to 2020.”

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This piece was inspired by a robust – and rude – posting on the forum of moneysavingexpert.com (so rude and sweary it appears to have been deleted). Pic of children from Heatherton.

  • Punkass

    Funny, and informative.u00a0

  • http://www.zovelo.co.uk/ Chris

    Very nice and succinct. However, Pre-1974 cars DO pay VED, it’s Pre-1973 that are exempt. See hereu00a0http://bit.ly/I4WfTlnThat roller is still old enough to be exempt though, so u00a0the point stands.nNice shot of the horse that thinks he’s a woodpecker, btw.

  • Greg Price

    BTW, the Royal Family are not exempt from paying VED and Austen Chamberlain abolished Road Tax in 1936 – not Winston Churchill in 1926.

  • http://www.quickrelease.tv carltonreid

    Got a reference to Royal family paying VED? My sources – including parliamentary PQs – say otherwise. I’ve taken down the pic. You’re right it has the wrong date on it: first raid on the Road Fund was 1926, by Winnie, but it wasn’t finally toppled until 1937. (In fact it lingered on the statute books til 1950s but was never used from ’37 on).

  • http://www.quickrelease.tv carltonreid

    Pre January 1974 so we’re both right.

  • Martyn

    Chris is right about the VED date, a February 1973 car pays, my November 1972 car doesn’t. So the site does need a small correction.

  • Tim

    the “combatitive posting” you reference at the bottom seems to be an invalid link – don’t know whether the poster has removed it?

  • http://www.minnellium.com Dave Haygarth

    I pay Car Tax, but also use the roads for walking AND cycling. u00a0Does anyone know whether it’s okay for me to pay more car tax?

  • http://www.quickrelease.tv carltonreid

    Must have been removed by mods. Bummer.

  • http://twitter.com/Oldphrt Fred Scuttle

    We are paying subsidies for rich people that use electric vehicles as a second car in London.

  • http://twitter.com/1dangerouself MarkDangerousElf

    I can only ASSUME that this is the case as well, in the UK; in the USA, traffic laws CAME INTO BEING because the drivers of the new toys — AUTOMOBILES — could not/would not self-regulate, and share the same road they DID share the week before, as a user of another form of transport.  That seemingly endless labyrinth of legalese grew like weeds because of the relentless sense of entitlement that the additional speed, protection, and ‘freedom’ gave the motorist.  Neither cancerous growth has stopped, or even slowed, in the intervening century.

    When I hear from drivers about how others conduct themselves on the roads, as if drivers own and self-police them, I just shake my head and start to think about how to penalize private auto use to such an extreme that no one will WANT to do so.
    Unfortunately, I think it’s a bit of a Gordian Knot….

  • http://twitter.com/TitanicComber me

    Quick point about Tractors and other agricultural vehicles, They don’t pay ‘Road Tax’ if they are not travelling further than 1.5km and I quote from https://www.gov.uk/vehicle-exempt-from-car-tax

    Vehicles used just for agriculture, horticulture and forestry

    This includes tractors, agricultural engines and light agricultural
    vehicles used off-road. It also includes ‘limited use’ vehicles used for
    short journeys (not more than 1.5 kilometres) on the public road
    between land that’s occupied by the same person.

    So if you see someone that is breaking this rule, report them, and also report them if they are making a mess of the road as they are legally obliged to clean up after themselves so as not to pose a danger to other road users

  • http://www.quickrelease.tv carltonreid

    That’s covered here:
    http://ipayroadtax.com/bloody-tax-dodgers/bloody-tax-dodgers-theres-millions-of-em/
    Do you think it needs beefing up?

  • http://twitter.com/TitanicComber me

     Yup I do think it needs beefed up, you mention landrovers but it applies to any vehicle bought for the farm, tractors, cars, quads, lawnmowers, vans… and the majority can also be run on Red Deisel as well as being exempt under the 1.5k rule. All it has to be is bought by the farm not the farmer…

  • Kas

    That’s not entirely true Carlton.

    I used to own a double decker bus which was registered in January 1973 so required VED… but I managed to track down the factory records which showed that the chassis was built in December 1972 so it was reclassified historic and was exempt from VED, and more crucially for me, from LEZ as well. That was a happy day.

    The March 2013 budget did extend historic status to vehicles built before January 1 1974, but it doesn’t come into force until April 2014.

  • Darren

    If all this is fact then surely the government should change the name so that people do not have to argue about it.
    I remember a programme on TV that showed a pi chart breakdown of Road Tax, the Road fund license or whatever you’d like to call it, the two “facts” that have always remained in my mind was that 33% went into schools and education, and 17.5% went into repairing roads, so to me that says it is not purely to pay for polluting the atmosphere, but does actually have something to do with repairing our roads.
    In my opinion if this is still true, then surely all motorised vehicles should contribute something toward the upkeep of the road.
    Last but not least, if pollution is being reduced by most vehicle manufacturers, why does a “P” reg Ford Galaxy cost £200 odd to tax and a newer less poluuting Ford Galaxy cost around £425?

  • Me

    I’m surprised that people don’t realise that the majority (if not all) tax revenue collected, is gathered together and redistributed to individual departments by the Treasury. So it is true that there is no direct link between Vehicle Excise Duty (VED) and the funds used to build / maintain public roads. Therefore your claim that “Roads are paid for by income tax and council tax” is incorrect as they are paid for by a combination of all taxes.

    It is however, a fact that a motorist / car owner will contribute more to that total fund through taxes such as VED and fuel duty than a non-motorist under the same circumstances.

    In 2012 VED and fuel duty combined raised £38.3bn for the Treasury, this is compared to a spend of £3.69bn by the Highways Agency and, according
    to figures published by the government, estimated spending by local governments in England on all transport services (including public transport, lighting parking services etc) of around £7.88bn in 2013-2014. I would therefore imagine that the total revenue raised by motorists though VED and fuel duty exceeds the total spend on maintaining and building roads.

    Please don’t get me wrong, I am not trying to say that motorists own the road or have any more right to be there than cyclists. I believe the roads are there for everyone to use and that we all should (the majority do) consider other users when we do use them. I can however understand how most motorists feel as they seem to be paying more and more through taxes and charges and yet the roads are in the worst state for many years, parking is getting harder and more expensive, public transport is poor and expensive etc.
    Motorists have been seen as an easy target to raise extra funds by government after government.

    However my main point is that rather than trying to “score points” about silly insignificant issues such as who pays for the roads we should concentrate on removing this “us and them” attitude that some motorists and cyclists have. There is no excuse for making comments regarding injuring cyclists and people who do such things should be prosecuted, however cyclists must also recognise that as much as there are bad / inconsiderate drivers out there, there are also bad / inconsiderate cyclists going through red lights, cycling on pavements etc.

    As both a cyclist and a motorists I can see both sides of the discussion but I believe rather than arguing over who owns the roads and who has the right to use the roads we should concentrate our efforts on improving the transport infrastructure in this country. Doing things such as increasing the number of cycle lanes, building safe places to store bikes, encouraging better driving and cycling though better education and training, improving safety at junctions, repairing road surfaces etc.

  • Happyskeptic

    Darren the name of the tax is ‘Vehicle Excise Duty’, which fairly clearly implies it’s a tax on vehicles themselves (in fact the environmental damage from vehicles) and not road usage. The term ‘road tax’ is completely made up propaganda by the motoring lobby and motorists who believe cyclists shouldn’t be allowed to share the roads – the only time this country had an actual ‘road tax’ was before 1937.

    Arguments about x% of the VED goes here and x% goes there are meaningless because the government consolidates all revenue from VED in the same ‘pot’ as revenue from income tax, VAT and council tax. It then allocates that revenue based on its policies, regardless of whichever tax the revenue came from originally.

    The only time you’ll pay a ‘road tax’ to use a road is on a toll bridge or toll motorway, where cyclists and pedestrians usually aren’t allowed anyway.

  • Ryan Hackett

    ‘removing this “us and them” attitude’

    It would be easier to cure cancer and bring Christmas to Iraq.