Tax black hole
United Kingdom residents who own electric cars could face a new tax as early as 2025. Jeremy Hunt, the current Secretary of State for Foreign and Commonwealth Affairs, is looking to fill a £35bn black hole that has opened up in the country's budget. One way he is proposing to do this is by taxing electric cars. This would be a major blow to people who have made the switch to electric cars in an effort to be more environmentally friendly.
The Move Towards Electric Cars
In recent years, there has been a move away from petrol and diesel cars towards electric cars. This is largely due to environmental concerns; electric cars emit far less carbon dioxide than petrol or diesel cars. In the UK, sales of petrol and diesel cars have been falling while sales of electric cars have been on the rise. In 2018, around 64% of new car sales were petrol or diesel while nearly 36% were electric.
The black hole in the UK's budget has largely been caused by a decrease in fuel duty. This is due to the fact that people are driving less thanks to the pandemic and because more people are now driving electric cars, which don't use fuel. The government is also losing out on VAT from fuel sales. All of this has contributed to the £35bn black hole.
Will Electric Car Owners Be taxed?
It is not yet clear if Jeremy Hunt's proposal to tax electric cars will go ahead. However, it has been met with a great deal of opposition. Many people feel that it would be unfair to tax people who have made the switch to electric cars in an effort to be more environmentally friendly. Others argue that the move would only serve to discourage people from making the switch to electric cars, which would ultimately be bad for the environment.
The jury is still out on whether or not electric car owners in the UK will be taxed by 2025. However, the proposal has been met with a great deal of opposition. Many feel that it would be unfair to tax people who have made the switch to electric cars in order to help reduce emissions. Only time will tell what the final decision will be but, for now, it looks like Jeremy Hunt's proposal may not come to fruition.