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The great motoring tax swindle uncovered

By / 10 years ago / Latest News / No Comments

The report also finds that only 38 pence of every pound that motorists pay at the pump is for fuel – 62% is tax in the form of fuel duty and VAT.

Other findings from the IAM report include:

• The percentage of tax paid at the pump rose from 47% in 1980 to 75% in 2000. It has fallen to 62% in 2010 as a result of increases in the price of oil.

• In 2010, the pump price of petrol increased by 27% and that of diesel by 18%. In the first half of this year the pump price of petrol increased by 8% and diesel by 12%.

• Motorists paid £28.7bn in tax and duty in 1985-6 compared to £44bn in 2007-8 in real terms.

• While motorists are paying more generally, the amount paid per individual car owner has fallen.  More cars on the road are spreading the tax burden among more motorists.

• The Government spends only about one-third (£12.8bn) of its total tax revenue from road users (£43.9bn) on roads and local public transport.

• Increased spending in the past decade has been mainly on public transport; spending on local roads has also increased substantially but is likely to fall considerably from now on.

• Since 2002, the Government has spent more on rail infrastructure than road infrastructure, although rail is used for only seven% of all passenger travel.  In 2008 the government spent £4.8bn on road infrastructure compared to £6bn on rail infrastructure.

IAM director of policy and research Neil Greig said: 'Using so little of the taxes motorists pay on road upkeep is plainly unfair.  Motorists are also paying the price as Britain’s potholed and increasingly dangerous roads take their toll, damaging tyres, wheels, steering and suspension.

'Cuts are clearly going to have an impact on transport investment, but as more roads become more potholed and dangerous, spending on infrastructure now will save money in the long-term.'

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