Advice

What does road tax pay for?

What does road tax pay for? If trucks damage the road more do they pay more? Why do people who rarely use the road pay the same as people who use them every day? And should all road users, including cyclists be made to pay it? Let’s put the classic argument between road users to bed once and for all.

A frequent argument shouted at cyclists is the classic – ‘You don’t even pay for the roads!’ Funnily enough, the biker, car driver or trucker who shouts these words doesn’t either.

Road tax, or Vehicle Excise Duty as it should properly be called, does not pay for roads to be either built or maintained. In fact, road tax hasn’t paid for roads since 1937.

Instead, the revenue goes into the general taxation pot collected by the Chancellor of the Exchequer. The same happens with Fuel Duty. Not a single bean is spent directly on roads.

It means, in effect, that your VED payment is used for lots of things, like infrastructure projects, payments for EU membership, teachers, hospitals etc.

Angry drivers ‘who pay to use the road’ should actually take comfort in knowing that cyclists do in fact pay their fair share for use of the road – as long as they are taxpayers.

In the same way that road tax goes straight into the taxation pot, all tax payers in effect contribute to the building and upkeep of the road network.

It also means because it is a tax rather than a charge, that everyone pays the same regardless of how much they actually use a road or their vehicle.

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Who gets the money for the roads, then?

Roads come under the responsibility of the Department of Transport, who take the money allocated to them by the Exchequer and distribute it to the Highways Agency, who maintain the strategic road network in England, and to Local Authorities who maintain everything but motorways and trunk roads (the more significant ‘A’ roads).

Do larger, heavier vehicles pay more?

They don’t. In fact, some cars pay less than motorcycles.

If a larger vehicle needs a larger engine, it’s not being taxed on weight or the damage it can do to the road. If anything, what the VED does ‘pay for’ is the right to pollute. In effect, the more you want to pollute, the more you need to pay.

Cars registered before 1 April 2017 and after 1 March 2001 (the vast majority before the new flat rate rules were introduced) are calculated on their CO2 emissions. Motorbikes on their engine size, the assumption being that the larger the engine, the more emissions it produces.*

In the case of motorbikes, calculating VED on engine size is patently ridiculous as a Euro 4 600cc engine is likely to produce fewer emissions than a 250cc two-stroke.

The problem with the difference in the way cars and bikes are taxed is that it leads to cars with CO2 emissions far greater than motorbikes being taxed a fraction of the cost. But we’ve strayed from the subject a bit…

Lorries are calculated differently to cars and vans. As well as VED trucks (including foreign registered vehicles) pay an HGV Road User Levy – based on a number of factors including the number of axles a vehicle has and the weight it has to carry. In theory, this is a levy that pays for the consequences of using the road – actual damage and associated pollutions.

Once again though, the money doesn’t directly pay for a single pothole or damaged bridge. It all goes off to Number 11 Downing Street, before being siphoned off for various uses.

So if there is a dramatic increase in road usage and therefore the amount of road maintenance needed, is there a corresponding increase in the amount of money available for building and fixing roads?

Not directly. The Department of Transport has to slug it out with everyone else who face increased costs or issues within their Government departments.

So even though big lorries may cause big potholes that whole scooters can fall into (kidding) they don’t pay to have them fixed. They are paying for nurses and teachers.

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Road tax wouldn’t cover the costs anyway

To make it even clearer that road tax doesn’t pay for roads, some vehicles – zero emissions cars and motorcycles – don’t pay anything at all. Assuming that at some point the majority of vehicles will be zero emissions, if the VED were to pay for roads and maintenance, then the amount available would diminish every year.

This explains the switch back in 1937. Even when ‘road tax’ was supposedly collected to pay for roads, not enough was actually collected to do that, so roads have pretty much always been paid for directly from Government coffers.

So the short answer to ‘what does road tax pay for’ is that ‘road tax’ actually pays for just about anything, including roads, because it can’t really afford to pay only for the roads themselves.

If you wanted a system like that it’s called road charging. And although they call it something very different, in London at least, that’s how the majority of roads are going to be charged for in the very near future…

Get yourself sorted:

Remember, if you have a bike that isn’t going to be using the road for some time it’s often cheaper to declare it SORN than keep paying VED.

*The Government say this is because ‘the European Union has not yet established a design type approval test for motorbikes that requires CO2 data to be produced for each model variant. The current scheme for motorbike manufacturers is voluntary and so does not offer a complete data set for all motorbikes in production. The Government is therefore not in a position to treat motorbikes on a CO2 emissions basis for VED.’
 
The real reason is the Department of Transport has presumably done some calculations somewhere and come up the the answer “It’s probably not worth our time working it all out.” 

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Sue Denim

Sue Denim

International woman of mystery, bike nut and in her words, 'If it's worth riding, babes, I'll ride it.' Well put.

Sue likes to keep a low profile as she has another day job...