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Cartax - epetition reply

8 March 2007

We received a petition asking:

"We the undersigned petition the Prime Minister to Abolish Vehicle Road Tax and collect the lost Revenue by fuel duty."

Details of petition:

"We wish the PM to abolish vehicle licenceing duty and collect the revenue through tax on vehicle fuel. Thsi would simplyfy vehicle ownnership and mean that a minority of individuals would not be able to avoid the tax as well as being fairer so that those who use the roads most pay the most."

Read the Government's response

Abolition of vehicle excise duty (VED) in favour of an increase in fuel duty has been suggested previously and is reviewed periodically. One of the main arguments for retaining VED is the need to maintain the central vehicle register at the Driver and Vehicle Licensing Agency (DVLA). The register, which contains in excess of 32 million vehicle records, is regularly updated when vehicles are relicensed. In addition, the vehicle relicensing process provides an effective system for ensuring that motorists are complying with MoT and insurance requirements.

Another reason for retaining VED is that the use of VED differentials can influence the purchasing behaviour of motorists. There are already different VED rates for lorries and buses, which reflect the road track costs of larger and heavier vehicles and encourage businesses to purchase less damaging vehicles. To abolish VED would limit the Government's ability to use fiscal measures to reflect the environmental and economic costs of specific types of vehicles.

VED raises only one fifth of the revenue that is derived from road fuel taxes. This means that those who use their vehicles more than others already pay more in overall vehicle taxation and will continue to do so.