UK’s electricar clean-up: The hidden costs

THEY DON'T LOOK ANY DIFFERENT: This is the electric Mini Cooper now in global showrooms. Image: BMW / Mini
THEY DON’T LOOK ANY DIFFERENT: This is the electric Mini Cooper now in global showrooms. Image: BMW / Mini

LONDON, England – Britain’s plans to ban fossil-fuel vehicle engines in favour of electric power will threaten the UK’s national tax income.

That’s the opinion of Mark Cunningham, a manager at London taxation experts Blick Rothenberg.

Cunningham explained: “The government has for some years incentivised a move to low-emissions company cars through lower taxes and reliefs but has now started to reduce incentives for their purchase.

READ MORE on electric cars on Carman’s Corner.

“As the number of electric vehicles increases we could see further significant changes to allowance and company-car tax rates.

“Ultimately we will see battery battery-charging rather than petrol and diesel stations.”

This was when the tax regime would change and Cunningham believes it won’t be long before an electric-charging tax will be introduced – to the detriment of private individuals and corporates.

CHANGE COULD CHALLENGE GOVERNMENT

Here’s the math: Of the £1.30 UK retail price of a litre of fuel 80p is collected in tax!

Alan Pearce, a VAT expert with the same company, added: “As the number of commercial and private charging points increases we could see the government increasing the UK’s five percent VAT rate on domestic electricity to compensate for the lost duty/VAT on carbon fuels.”

Meanwhile lawyer Robert Johnson has asked how the fuel ban will affect the classic-car industry. He added: “Could this lead to a new tax on cars currently not subject to the current tax regime – such as classics?

“This could result in lengthy legal challenges against the UK government from classic-car enthusiasts.”

WHAT THE CORNER THINKS…

Carman’s Corner would like to add its five cents-worth:

A ban on conventional internal combustion engines will cost many thousands of jobs in the vehicle maintenance industry with serious consequent erosion of the UK’s income-tax base and add hugely to unemployment – with consequent financial assistance to those unemployed.

READ ALL ABOUT the road that will charge your battery buggy

The state will also lose billions of pounds in VAT on vehicle servicing bills: electric motors are far easier to maintain than internal combustion engines.

There will also be serious unemployment in the fuel supply chain, at refineries, off-shore drilling rigs, tanker drivers, fuel stations – each with its own reduction of corporate, private and value-added taxation.

FEARS ABOUT ELECTRICITY SUPPLY

The tax will have to be gathered elsewhere – likely on electric vehicles – which will erode the financial benefits of owning such a car or van in the first place.

Should the same spread to South Africa there will be mass unemployment among fuel forecourt staff and other anciliary fuel-station operations.

Also in Britain, there are fears that huge investment in electricity generation will be needed to offset the massive nightly demand each evening as commuters arrive home and put their vehicle(s) on charge.

While there is warning of a ban on petrol/diesel cars The Corner has seen no mention of other types of road transport such as buses and trucks – to which all of the above and their associated support industries also would apply.

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