Millions of drivers could be slapped with new car taxes in the near future as Rachel Reeves considers introducing road pricing through pay-per-mile charges.
Reports suggest Chancellor Rachel Reeves will choose to introduce car tax changes for electric car owners, with drivers having to pay 3p per mile.
It comes as the Government looks to plug a £50billion financial black hole, with several motoring policies believed to be under review by the Treasury.
New data suggests that van drivers will be spared the hefty pay-per-mile charges, although plug-in hybrid cars will be required to pay the 3p per mile charge.
The Times reports that PHEV owners will be included in the scheme at a discounted rate, although electric vans will not be required to pay.
It adds that owners of plug-in hybrid vehicles are expected to be charged the pay-per-mile charge and fuel duty, hitting them with a double tax.
Some of the largest manufacturers in the world could be involved in the new taxes if the Government wants to avoid hitting van drivers with the charge.
One of the best-selling automakers, Ford, produces the Transit, which is often seen as the backbone of the country, and a favourite of the “white van man”.
Chancellor Rachel Reeves could introduce new car tax measures at the Budget later this month
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GETTYIt has been claimed that the Government will use a consultation to consult on the planned changes to motoring taxation before the proposals are rolled out in 2028.
The proposals come as the Government attempts to deal with the expected drop in fuel duty revenue as the number of petrol and diesel drivers dwindles.
More motorists than ever are switching to electric vehicles, meaning the amount raised through fuel duty will continue to fall, with some estimating that it could leave a £30billion funding gap.
Chancellor Rachel Reeves could also target fuel duty in a bid to raise money, with the likelihood of cancelling the 5p cut and unfreezing the rate for the first time since 2011.
Road pricing, in the proposed form of pay-per-mile, has been touted for a long time, especially with the looming drop in fuel duty revenue.
However, there have been some concerns regarding how this could work, given the difficulties in a “trust system” or when drivers bring them in for an MOT test.
Experts have also frequently complained about the need to ensure the tax works for rural drivers and those who have disabilities, to ensure they are not overcharged when paying the tax.
Chancellor Rachel Reeves will deliver the Autumn Budget on Wednesday, November 26, with drivers eagerly anticipating further details about the pay-per-mile taxes.
Speaking to GB News, a Treasury spokesperson said that it would not comment on tax speculation, and that any policy changes would be announced at the Autumn Budget.
A Government spokesperson said: “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles.
“We want a fairer system for all drivers whilst backing the transition to electric vehicles, which is why we have invested £4billion in support, including grants to cut upfront costs by up to £3,750 per eligible vehicle.
“Just as it is right to seek a tax system that fairly funds roads, infrastructure and public services, we will look at further support measures to make owning electric vehicles more convenient and more affordable.”