[EvilDrPorkChop]

Originally Posted by JD6

Similarly I favour hiking fuel duty considerably, but I can see that doesn't work politically, as Macron has discovered...

Really what is that going to achieve though other than raise more money for our government? It just means more cost for everyone. It's not like our public transport is great, if it was I could see a reasoning behind it.

I doesn't just have an impact on road users either. Cost of deliveries etc. will go up.

[JNW1]

Originally Posted by EvilDrPorkChop

Really what is that going to achieve though other than raise more money for our government? It just means more cost for everyone. It's not like our public transport is great, if it was I could see a reasoning behind it.

I doesn't just have an impact on road users either. Cost of deliveries etc. will go up.

Not sure whether JD6 meant he favoured a considerable hike in fuel duty on top of existing taxes or whether he was suggesting increased fuel duty as an alternative to the road fund licence?

If the former I agree that would just mean increased costs for everyone and it would indeed be pretty unpopular; after all, who likes to pay more tax?! However, I can see the logic for increasing fuel duty in exchange for abolishing the road fund licence and I say that because to me it makes more sense to relate the tax take on vehicles to their usage rather than their ownership (especially if trying to reduce pollution and improve the environment is one of the objectives of the tax system). Obviously a change of that sort would mean higher mileage drivers paying more but if you subscribe to the view "the polluter ought to pay" then arguably isn't that right?

In contrast, taxing someone heavily just because they have an expensive car which is used relatively infrequently makes little sense if improving pollution levels and the environment is a priority; basically it's just a tax on apparent wealth and why should someone be penalised because they choose to spend their money on a car as opposed to something else?

Having said all of that, since when have taxes been "fair" or "appropriate"? We all know they're really just about raising revenue to fund government expenditure and so it is with the surcharge on cars costing over £40k; despite the claims of some on here, most people can't afford to spend £40k on a car (or anything like) and therefore the government gets away with this surcharge without significant challenge because the masses perceive it to be a tax on the rich that doesn't affect them....

[Goneinsixtyseconds]

All this talk of £40k cars and people being rich misses the point. You can pay this tax on a new car you've paid £29k for with the right discounts.

Or you can accidentally incur it buying a £15k secondhand car. It's happened already on here when someone turned up on collection day with their debit card to pay the road tax, and only then did the dealer tell them it was £450 a year.

You could argue that manufacturers should make list price more realistic, then plenty more "average" cars like a specced up 320d would still be under £40k. But, do we really want that? The big discounts for those that know they can be had work quite well for me, personally I wouldn't want that change to be made.

[JD6]

Originally Posted by JNW1

Not sure whether JD6 meant he favoured a considerable hike in fuel duty on top of existing taxes or whether he was suggesting increased fuel duty as an alternative to the road fund licence?

While the U.K. still has a deficit, I would use both, although I can see that the fuel duty has its problems. This isn’t just about climate change, but ensuring that people who manage to evade other taxes are caught by this relatively simple one to collect.

The tax on £40k cars is set at about the right level from my perspective. Even if you need a larger car, there are plenty of decent but ordinary cars which are well below that. Nobody needs a car which has a list of over £40k. I would probably add a couple more bands at say £80k and £120k though.

[EvilDrPorkChop]

Originally Posted by Goneinsixtyseconds

All this talk of £40k cars and people being rich misses the point. You can pay this tax on a new car you've paid £29k for with the right discounts.

Or you can accidentally incur it buying a £15k secondhand car. It's happened already on here when someone turned up on collection day with their debit card to pay the road tax, and only then did the dealer tell them it was £450 a year.

And this is the issue, it'll really hit the used car market. All the vehicles that were over £40k new which will be around the £15k mark at 4/5/6 years old will still hold a £450 per year RFL. Surely that's going to have a knock on affect with second hand values.

Originally Posted by Goneinsixtyseconds

You could argue that manufacturers should make list price more realistic, then plenty more "average" cars like a specced up 320d would still be under £40k. But, do we really want that? The big discounts for those that know they can be had work quite well for me, personally I wouldn't want that change to be made.

You'd of thought that the manufactures would realistically price them, or even think to price them at £2/3k under £40k to allow for a few extras. For instance a base X3 20i xLine is £40770.

Originally Posted by JD6

The tax on £40k cars is set at about the right level from my perspective. Even if you need a larger car, there are plenty of decent but ordinary cars which are well below that. Nobody needs a car which has a list of over £40k. I would probably add a couple more bands at say £80k and £120k though.

I think the banding idea would be better, but for instance £40k; £155, £60k; £310, £80k; £620.

[DaveH28]

Originally Posted by EvilDrPorkChop

And this is the issue, it'll really hit the used car market. All the vehicles that were over £40k new which will be around the £15k mark at 4/5/6 years old will still hold a £450 per year RFL. Surely that's going to have a knock on affect with second hand values.

You'd of thought that the manufactures would realistically price them, or even think to price them at £2/3k under £40k to allow for a few extras. For instance a base X3 20i xLine is £40770.

I think the banding idea would be better, but for instance £40k; £155, £60k; £310, £80k; £620.

Agree with this... however, far too sensible to implement.

[JNW1]

Originally Posted by JD6

While the U.K. still has a deficit, I would use both, although I can see that the fuel duty has its problems. This isn’t just about climate change, but ensuring that people who manage to evade other taxes are caught by this relatively simple one to collect.

The tax on £40k cars is set at about the right level from my perspective. Even if you need a larger car, there are plenty of decent but ordinary cars which are well below that. Nobody needs a car which has a list of over £40k. I would probably add a couple more bands at say £80k and £120k though.

I agree what you're proposing would be simple to collect but to me the issue with fuel duty is it would probably have a disproportionate effect on the relatively less well off who are a) least able to afford it and b) unlikely to be tax avoiders or evaders on any significant scale. Therefore, if the motive is to mitigate the effect of tax evasion, your proposal strikes me a bit of a regressive - and therefore unfair - way of doing it!

[Goneinsixtyseconds]

Originally Posted by JNW1

I agree what you're proposing would be simple to collect but to me the issue with fuel duty is it would probably have a disproportionate effect on the relatively less well off who are a) least able to afford it and b) unlikely to be tax avoiders or evaders on any significant scale. Therefore, if the motive is to mitigate the effect of tax evasion, your proposal strikes me a bit of a regressive - and therefore unfair - way of doing it!

I agree. It's ok in theory to say that fuel tax should tax that use the roads the most. It is also a pretty ridiculous concept to try and make it high enough to use it to collect tax from serial tax avoiders! As you say, quite kindly, a "bit" regressive.

[JD6]

Originally Posted by JNW1

I agree what you're proposing would be simple to collect but to me the issue with fuel duty is it would probably have a disproportionate effect on the relatively less well off who are a) least able to afford it and b) unlikely to be tax avoiders or evaders on any significant scale. Therefore, if the motive is to mitigate the effect of tax evasion, your proposal strikes me a bit of a regressive - and therefore unfair - way of doing it!

I recognise that significantly higher fuel duty would be politically undeliverable as I have said before. As for tax evasion, we are clearly talking at cross purposes - I am referring to cash-in-hand workmen, taxi drivers etc. Those who declare a small proportion of their actual income. This is not a policy which impacts the wealthy. We need other forms of tax for that.

The luxury tax is both politically deliverable and non-regressive. However some regressive taxation such as VAT is necessary in my view to spread the tax burden. I don’t think it’s particularly useful to consider one tax type in isolation, rather the whole array of taxes, when considering regressive/progressive taxation.

[Goneinsixtyseconds]

Originally Posted by JD6

I recognise that significantly higher fuel duty would be politically undeliverable as I have said before. As for tax evasion, we are clearly talking at cross purposes - I am referring to cash-in-hand workmen, taxi drivers etc. Those who declare a small proportion of their actual income. This is not a policy which impacts the wealthy. We need other forms of tax for that.

The luxury tax is both politically deliverable and non-regressive. However some regressive taxation such as VAT is necessary in my view to spread the tax burden. I don’t think it’s particularly useful to consider one tax type in isolation, rather the whole array of taxes, when considering regressive/progressive taxation.

How would fuel tax catch cash in hand workmen? The vast majority of the ones I know work locally, and then work somewhere all day, not drive. Do about 5,000 miles a year.

They'd pay more tax through the current RFL.

[JD6]

Originally Posted by Goneinsixtyseconds

How would fuel tax catch cash in hand workmen? The vast majority of the ones I know work locally, and then work somewhere all day, not drive. Do about 5,000 miles a year.

They'd pay more tax through the current RFL.

They are likely to drive more than their declared tax position would suggest. They will drive to jobs, but with a higher (relative) income, they are likely to drive more for leisure too. Clearly this is particularly effective for taxi drivers.

The point is that the only practical means of extracting tax revenue from people like this is by taxing everyday activities, by means of VAT, fuel duty etc. These are regressive taxes, but for rather obvious reasons progressive taxes do not work on people like this who don’t declare or understate their income.

So I suggest that some regressive taxes are necessary, provided that the broader tax system is not regressive.

[Goneinsixtyseconds]

Originally Posted by JD6

They are likely to drive more than their declared tax position would suggest. They will drive to jobs, but with a higher (relative) income, they are likely to drive more for leisure too. Clearly this is particularly effective for taxi drivers.

The point is that the only practical means of extracting tax revenue from people like this is by taxing everyday activities, by means of VAT, fuel duty etc. These are regressive taxes, but for rather obvious reasons progressive taxes do not work on people like this who don’t declare or understate their income.

So I suggest that some regressive taxes are necessary, provided that the broader tax system is not regressive.

The theory is just full of flaws.

Most do very little mileage, driving to jobs doesn't add up to much. Taxi drivers being the only exception, but they don't make up a huge proportion of the cash economy. And let's be honest, most mini cab drivers are are hardly rolling in cash anyway.

But the worst part is you draw hardly any extra cash from those you think it targets, but penalises heavily businesses and individuals that already pay their fair share in tax and cover a lot of miles.

Sorry, no, the even worse part than that, is that all the honest, but lowest paid PAYE tax payers in the economy get massively hit in the pocket too. It just doesn't work.

[JD6]

Originally Posted by Goneinsixtyseconds

The theory is just full of flaws.

Most do very little mileage, driving to jobs doesn't add up to much. Taxi drivers being the only exception, but they don't make up a huge proportion of the cash economy. And let's be honest, most mini cab drivers are are hardly rolling in cash anyway.

But the worst part is you draw hardly any extra cash from those you think it targets, but penalises heavily businesses and individuals that already pay their fair share in tax and cover a lot of miles.

Sorry, no, the even worse part than that, is that all the honest, but lowest paid PAYE tax payers in the economy get massively hit in the pocket too. It just doesn't work.

I disagree. Firstly you have no idea what sort of mileage the typical cash-in-hand workman will do. It seems clear that they will travel more miles than they would if they weren’t working, i.e. if their tax declaration was genuine. But it’s a lot broader than that - there is a fair section of the economy which pays no tax by under / not declaring, and the only realistic way to raise some revenue from them are regressive taxes which catch everyone.

You seem to have missed the wider point though. I am not suggesting that tax in general becomes more regressive, or even higher, but that some taxes of this kind have a place. I also prefer taxes which don’t cost a lot to collect - raising fuel duty costs nothing extra to collect.

Other rates could be adjusted to avoid hitting those who already pay enough.

[thescouselander]

I do wonder if the luxury car surcharge has made the government any money at all - they may have even lost money.

I think most people intending to buy a car around the £40k list price will choose a model that comes in underneath that figure so not only will the government lose out on the tax itself they'll also get less VAT as a result of that decision. I'd bet this loss in VAT probably outweighs the additional tax collected from people who do purchase above the threshold.

[Goneinsixtyseconds]

Originally Posted by JD6

I disagree. Firstly you have no idea what sort of mileage the typical cash-in-hand workman will do. It seems clear that they will travel more miles than they would if they weren’t working, i.e. if their tax declaration was genuine. But it’s a lot broader than that - there is a fair section of the economy which pays no tax by under / not declaring, and the only realistic way to raise some revenue from them are regressive taxes which catch everyone.

You seem to have missed the wider point though. I am not suggesting that tax in general becomes more regressive, or even higher, but that some taxes of this kind have a place. I also prefer taxes which don’t cost a lot to collect - raising fuel duty costs nothing extra to collect.

Other rates could be adjusted to avoid hitting those who already pay enough.

It still a load of rubbish. I don't care if they travel to jobs. All the tradesmen I know, which is a lot, do the vast majority of their work in the town they live in and spend most of the day with their van at the end of someone's drive, with the occasional trip to the builders merchant a mile away.

I know this for a fact, because I help a few of them source vans on pcp's and they all get them on under 8,000 miles. I also have a close friend who worked for Northgate, one of the largest van hire companies in the UK. If I tried to hire vans for logistics work they are expensive, because their whole fleet was aimed at lower mileage users, tradesmen were his main individual customers, after utilities companies for business. So I do have a reasonable idea. Try phoning a plumber in Birmingham to do a job in Derby, the call won't usually last very long. One of my friends won't even do jobs in Chesterfield, which is 6 miles from where he lives.

Yet, my wife travels to work in Rotherham, as do some of her colleagues in the NHS, then they work in the community doing well over 15,000 miles a year.

They already pay their fair share in tax.

The reason this has never been suggested to fix the cash economy tax regime, isn't because no one has been clever enough to think if it, but because it doesn't work in any way.

You can't tax some of the lowest mileage workers, by the mile, to recover anything. A large number of cash in hand workers and labourers in London for example won't even own cars or vans at all!

You might need to give your head a wobble and think again.

[JD6]

Originally Posted by Goneinsixtyseconds

It still a load of rubbish. I don't care if they travel to jobs. All the tradesmen I know, which is a lot, do the vast majority of their work in the town they live in and spend most of the day with their van at the end of someone's drive, with the occasional trip to the builders merchant a mile away.

I know this for a fact, because I help a few of them source vans on pcp's and they all get them on under 8,000 miles. I also have a close friend who worked for Northgate, one of the largest van hire companies in the UK. If I tried to hire vans for logistics work they are expensive, because their whole fleet was aimed at lower mileage users, tradesmen were his main individual customers, after utilities companies for business. So I do have a reasonable idea. Try phoning a plumber in Birmingham to do a job in Derby, the call won't usually last very long. One of my friends won't even do jobs in Chesterfield, which is 6 miles from where he lives.

Yet, my wife travels to work in Rotherham, as do some of her colleagues in the NHS, then they work in the community doing well over 15,000 miles a year.

They already pay their fair share in tax.

The reason this has never been suggested to fix the cash economy tax regime, isn't because no one has been clever enough to think if it, but because it doesn't work in any way.

You can't tax some of the lowest mileage workers, by the mile, to recover anything. A large number of cash in hand workers and labourers in London for example won't even own cars or vans at all!

You might need to give your head a wobble and think again.

I understand that a fuel tax, or a luxury vehicle tax isn't in itself a complete solution to the undeclared economy, and that there are people who won't be affected by these two examples. However, I believe that taxes of this type, along with a range of others, can be effective in getting some revenue from those who would otherwise avoid it. The cash-in-hand people I know cover a lot of miles (>20k) but they don't just work in one town.

You seem to have reverted to keyboard warrior mode - the one which got you banned previously and seems likely to do so again. You appear to be incapable of having a discussion, where you disagree with someone, without becoming offensive.

[ossi1]

Originally Posted by Goneinsixtyseconds

All this talk of £40k cars and people being rich misses the point. You can pay this tax on a new car you've paid £29k for with the right discounts.

Or you can accidentally incur it buying a £15k secondhand car. It's happened already on here when someone turned up on collection day with their debit card to pay the road tax, and only then did the dealer tell them it was £450 a year.

You could argue that manufacturers should make list price more realistic, then plenty more "average" cars like a specced up 320d would still be under £40k. But, do we really want that? The big discounts for those that know they can be had work quite well for me, personally I wouldn't want that change to be made.

This was similar to my situation and it still leaves a bitter taste in my mouth. My car was pre reg. List price was £46K. It had sat in a showroom for 4 months and I bought it for £29K with a few miles on it and never used.

The dealer initially fudged the tax issue claiming it was the old price so I put a deposit down. When I found out the true price I went down with the intention of cancelling the order but was told I would lose my deposit (the car was being delivered from a dealership up north and they claim they had invoked transportation costs). I was told oh well 'its only the price of a Nandos' .

It wasn't that I couldn't afford it, it was the PRINCIPAL of the matter. The principal that this is simply a stealth tax based on a system that doesn't make sense.

A list price is nonsensical . Without doubt manufacturers have inflated list prices because most people buy on finance and its a big game of discounting so you could argue that they are now shooting themselves in the foot if sales drop off as a result. Surely the VED should be based on the purchase price if anything, the problem is I guess that would be difficult to monitor as no purchase price in any deal would be the same.

[Goneinsixtyseconds]

Originally Posted by JD6

I understand that a fuel tax, or a luxury vehicle tax isn't in itself a complete solution to the undeclared economy, and that there are people who won't be affected by these two examples. However, I believe that taxes of this type, along with a range of others, can be effective in getting some revenue from those who would otherwise avoid it. The cash-in-hand people I know cover a lot of miles (>20k) but they don't just work in one town.

You seem to have reverted to keyboard warrior mode - the one which got you banned previously and seems likely to do so again. You appear to be incapable of having a discussion, where you disagree with someone, without becoming offensive.

Apologies, shouldn't be rude, but in my opinion you do just keep ignoring basic logic.

I don't understand how this generates any significant tax from the cash economy (other than taxi drivers) and I have no idea how you stop it taxing unfairly low paid PAYE workers with significantly higher mileage than builders, plumbers, etc. Would be interested to hear how you think it actually would do this?

As I do a lot of miles, it just seems to me that all it can do is increase the difference between what I pay and what someone in the cash economy doesn't. It would increase my tax bill by more than it would increase theirs.

[JD6]

Originally Posted by Goneinsixtyseconds

Apologies, shouldn't be rude, but in my opinion you do just keep ignoring basic logic.

I don't understand how this generates any significant tax from the cash economy (other than taxi drivers) and I have no idea how you stop it taxing unfairly low paid PAYE workers with significantly higher mileage than builders, plumbers, etc. Would be interested to hear how you think it actually would do this?

As I do a lot of miles, it just seems to me that all it can do is increase the difference between what I pay and what someone in the cash economy doesn't. It would increase my tax bill by more than it would increase theirs.

I appreciate the apology.

Raising fuel duty in isolation will hit low paid PAYE workers, as you say. Every cheap/simple to implement tax policy will adversely affect some group which don't deserve to be hit. So I would use other tax policies to ensure that overall they are not adversely affected. There are two policies which are already coming into affect which target this group - raising the Personal Allowance, and raising the Minimum Wage far beyond inflation. The Personal Allowance has gone from £6,475 in 2010/11 to £12,500 in 2019/20 and is a clever policy in my view - there is very little point in taxing the low paid, only to hand them benefits to fill the gaps.

I am also not convinced that your experience of builders, plumbers etc only accepting work within a few miles of their home is typical across the country - my experience is very different with many having a 40-50 mile round trip to a job. I guess it depends on location.

That said, I accept that fuel duty (which raises £28bn a year) is a blunt tool and politically difficult to raise - people feel its effect straight away, unlike a raid on their pension funds which can be done with less protest.

[JNW1]

Originally Posted by ossi1

This was similar to my situation and it still leaves a bitter taste in my mouth. My car was pre reg. List price was £46K. It had sat in a showroom for 4 months and I bought it for £29K with a few miles on it and never used.

The dealer initially fudged the tax issue claiming it was the old price so I put a deposit down. When I found out the true price I went down with the intention of cancelling the order but was told I would lose my deposit (the car was being delivered from a dealership up north and they claim they had invoked transportation costs). I was told oh well 'its only the price of a Nandos' .

It wasn't that I couldn't afford it, it was the PRINCIPAL of the matter. The principal that this is simply a stealth tax based on a system that doesn't make sense.

A list price is nonsensical . Without doubt manufacturers have inflated list prices because most people buy on finance and its a big game of discounting so you could argue that they are now shooting themselves in the foot if sales drop off as a result. Surely the VED should be based on the purchase price if anything, the problem is I guess that would be difficult to monitor as no purchase price in any deal would be the same.

But was your bitter taste more a consequence of having been misled by the dealer? If so I understand completely!

Also, on the wider point I don't disagree this "luxury car tax" based on list price has little science to it (why £40k rather than £45k, £50k, etc?). It's also annoying when that list price often bears little resemblance to the price actually paid but, as you say, to do the latter would make administration of the tax more cumbersome (plus of course it would reduce the tax take for the Treasury and therefore to some extent defeat the object of the tax!).

However, whether you like it or not the new tax - and how it works - was well publicised in advance of it taking effect and therefore I struggle to have much sympathy with people who bought a car with a list price of over £40k without realising the implications on RFL. Nobody forces anyone to spend that much on a car so if anyone objects that strongly either buy a second-hand car that's old enough to escape the tax or buy a new one with a list price below the new tax threshold; sorry if that sounds harsh but it really is that simple IMO!

[RobUK]

My first ever car cost me £38.50 for 6 months car tax, and one of my early bikes cost just a tenner for a whole year. Think at the time I reckoned that was expensive!

[Herr Dreier]

Originally Posted by Goneinsixtyseconds

... spend most of the day with their van at the end of someone's drive, with the occasional trip to the builders merchant a mile away.

I know this for a fact, because I help a few of them source vans on pcp's and they all get them on under 8,000 miles.

I'm not sure that knowing they pcp on low mileage means they actually do low mileage. Ask teaston