Reeves urged to slap drivers with pay-per-mile tax that could raise £20bn

Car drivers face the possibility that every tendency to lead under radical plans to connect the black hole in Britain to public financial affairs will be charged.

The Decision Corporation – a research tank with close links to work – urged Chancellor Rachel Reeves to repair car taxes, warning that fuel duty revenues collapse with drivers turning into electric cars.

Her suggestion will witness that drivers are hitting an annual tax in addition to fees for each mile of 3P to 9p, with heavier batches that push more to reflect pressure on Britain’s roads. The report said that the system can win up to 20 billion pounds annually, which may cover two -thirds of the financial gap at the horizon of 30 billion pounds.

“Car taxes are an important part of the tax system, but they are also clear and important financial risks,” said Adam Corlette, author of the report. He suggested that miles be recorded through MOT exams, self -reporting, or remotely, with a recommendation to cut value -added tax on public shipping points and reflect long -term freezing on the fuel duty.

The fuel duty currently brings about 28 billion pounds annually, but the budget responsibility office is expected to decrease to 22.6 billion pounds by 2030. Corlette said that the tax was raised by 3 % per year and gradually reflected the temporary 5p may see the tax rising to approximately 70 pixels per liter by the end of the contract.

Car groups immediately pushed back, and warned that road pricing would not fairly collide with drivers while raising concerns about privacy and tracking. “Certainly, it will raise prices and perhaps the only way to manage it is to follow everyone, which has the effects of freedom and privacy,” said Ian Taylor, of the British drivers alliance.

The report comes at a time when Reeves faces severe pressure before its budget in November, with speculation that may need to collect up to 30 billion pounds in new taxes to meet its financial rules.

A Treasury spokesman declined to comment on the proposals, saying only: “The adviser makes tax policy decisions in financial events.”