Do you know where your VED actually goes?

[Chris71]

I found out something very interesting about 'road tax' the other day. It doesn't exist.

The old concept of road tax was abolished in the 1930s because Churchill feared it implied ownership of the roads. The General Vehicle Excise Duty that's replaced it to this day has no direct link to transport, it goes straight into what the government term 'consolodated funds' or basically the national piggy bank.

This means that the government can do with your 'road tax' as they see fit. Some probably does make it onto the roads, but it could go to anything from illegal wars in the Middle East to MP's moats. It also means that we all pay for the roads out of general taxation, irrespective of whether we drive a V12 Lamborghini, a Toyota Prius or nothing at all. We still have to pay it, but the money you pay in VED doesn't go to the roads any more directly than alcohol duty goes to the local pub.

Apologies for the politics, but it was news to me and has several rather dramatic implications. Firstly, we're not even getting a direct return on the huge amount of money we're fleeced for as motorists. And secondly, those who harp on about cyclists not paying 'road tax' (even ignoring the fact that any of them you find on here will be paying VED on at least one vehicle...) don't need to worry any more!

I do find this quite scandalous. Maybe it's naive to expect any better from politicians, but the idea of paying anything up to 400-odd quid for VED suddenly gets even worse when you realise we don't see any direct return.

[JR]

Hmmm. Yes, it's old news but ironically it does pay for the roads. In round figures HMG raises about £10BN from VED, out of £60BN a year in total from road users and spends about £10BN on roads, roughly the same amount as the VED.

[Chris71]

The figure may coincidentally be the same, but there's no direct allocation of funds as far as I'm aware. A little old lady who's never owned a driver's license pays a contribution to the roads...

[ThunderSpook]

In other news, the sky is blue and the sea is wet

[CrisW]

ThunderSpook said:

In other news, the sky is blue and the sea is wet

Round my way the sky is sort of an ash colour.

Or so every news channel seems to be telling me....

Edited by CrisW on Thursday 22 April 15:34

[Chris71]

ThunderSpook said:

In other news, the sky is blue and the sea is wet

Well you say that, there seem to be a lot of people on here convinced that as drivers they directly finance the roads, but people using them on bicycles don't. Apparently it is a revelation to them.

Also - and I realise this is hugely naive - I assumed the reason you applied a tax to specific activity was to pay for its effects.

[ThunderSpook]

I think it's generally people on here referring to the fact that the money SHOULD be spent on the roads as it's collection would suggest. Perhaps if a party suggested doing that then they'd be home free.

[cheadle hulme]

Roads were here before cars. They've always been funded by general taxation.

[JR]

cheadle hulme said:

Roads were here before cars. They've always been funded by general taxation.

What about turn pike roads?

[JR]

Chris71 said:

The figure may coincidentally be the same, but there's no direct allocation of funds as far as I'm aware. A little old lady who's never owned a driver's license pays a contribution to the roads...

That's an odd way to put it. So for every £10 that the old lady contributes she recieves £60 in return; it's like the EU in reverse.

[mattsimis]

"Road Tax" is slow low in the UK I wonder why you guys get all worked up about it at all.

[Balmoral Green]

Chris71 said:

I found out something very interesting about 'road tax' the other day. It doesn't exist.

I'm surprised this is still news to people, considering every couple of months many pedantic PH'ers like myself point this out time and time again. It ceased to even be called RFL in 1960. As you say, it's just tax.

We recently had the "I've paid my road tax, now go fix some fking potholes" campaign, which whilst I appreciate the sentiment, it was completely erroneous in its premise. It should have been "I've paid my council tax, now go fix some fking potholes".

Even now, on a new car invoice, you will have RFL listed, when thirty years ago I was getting our dealer invoices changed to VEL and then to VED, and bemoaning the fact that it had been abolished since before I was born, and yet it was still on all the paperwork. This was spurred on by a lecture from an elderly customer, one of my first ever sales, who refused to pay it, as it didn't exist! I had to re-invoice it as VEL to keep him happy

It does amaze me that it's still called RFL by nearly everyone, for whom it has never ever been RFL, and it's still thought to be for the roads.

[Chris71]

JR said:

Chris71 said:

The figure may coincidentally be the same, but there's no direct allocation of funds as far as I'm aware. A little old lady who's never owned a driver's license pays a contribution to the roads...

That's an odd way to put it. So for every £10 that the old lady contributes she recieves £60 in return; it's like the EU in reverse.

I don't quite follow you. Say this old lady never drives, cycles, or even takes the bus, she's still funding the roads. She never uses the roads and hence never gets any value from them - she's giving £10 (to use your analogy) for sweet FA.

Likewise all these 'tax dodging cyclists' that people moan about on here are actually funding the roads too. In fact, if they're income is high enough they may well be contributing more than the average income petrolhead.

[Balmoral Green]

Chris71 said:

Say this old lady never drives, cycles, or even takes the bus, she's still funding the roads. She never uses the roads and hence never gets any value from them - she's giving £10 (to use your analogy) for sweet FA.

But that's true of taxation in general. She may not have had any kids, but she still pays for the schools. And at least she isn't having to pay VED as well.

[JR]

Chris71 said:

JR said:

Chris71 said:

The figure may coincidentally be the same, but there's no direct allocation of funds as far as I'm aware. A little old lady who's never owned a driver's license pays a contribution to the roads...

That's an odd way to put it. So for every £10 that the old lady contributes she recieves £60 in return; it's like the EU in reverse.

I don't quite follow you. Say this old lady never drives, cycles, or even takes the bus, she's still funding the roads. She never uses the roads and hence never gets any value from them - she's giving £10 (to use your analogy) for sweet FA.

No, take a £10 unit. Her £10 is not for sweet FA it is for £60 so she's better off. Take BG's schools analogy: there's no separate tax for schools so for evry £10 she pays she recieves nothing; if we didn't have any schools she'd be better off. If we didn't have roads and road related taxes her tax bill would go up by £50: £10 down plus £60 up - you can't sensibly split the £10 and the £60.

[JR]

Chris71 said:

She never uses the roads and hence never gets any value from them

This is another odd phrase. Does she not shop?

Long day. J

[Chris71]

Balmoral Green said:

But that's true of taxation in general.

Very true, but I never said it was an exception.

It mostly just amused me that the PH anti-cycling mafia whinge about cyclists not paying 'road tax', when in fact it appears they do finance road repairs just like everyone else.

[Shmee150]

Picking up a new car in a week or two, going to be paying £550 showroom tax. Not happy.