Where does the money for Vehicle Excise Duty (VED) Go?

DonDaddyD

Even Parkers Guide refers to it as road tax and given that arguably a large percentage of the polpulation think its road tax and there for pays for the road, does anyone know why we pay it, where that money goes, who to and what it is used for?

Given the huge misconception and the general lack of trying to de-mistify the tax it may be one of the most misleading taxes going...

asprilla

Isn't is used to freeze ice for polar bears?

wgwarburton

Hi,
Straight into the same pot as most everything else. It's not ring-fenced in any way.

Cheers,
W.

daviesee

Expenses :evil:

davmaggs

It funds the school of the obvious

rjsterry

DonDaddyD wrote:

Even Parkers Guide refers to it as road tax and given that arguably a large percentage of the polpulation think its road tax and there for pays for the road, does anyone know why we pay it, where that money goes, who to and what it is used for?

Given the huge misconception and the general lack of trying to de-mistify the tax it may be one of the most misleading taxes going...

Although it didn't start off as this, it is now an encouragement for people to use vehicles with lower emissions. the money goes to an enormous piggy bank (which is where Bank, in London gets its name, the 'Piggy' having been dropped in the late 19th century on Queen Victoria's request), from where it is spent on everything from lollipop ladies/men to nuclear submarines - anything that is funded by central government.

Not all of the above is true.

Roastie

I think the point is that the amount raised from VED is nowhere near enough to cover the costs of the infrastructure required for motor vehicles.

cee

DonDaddyD wrote:

Even Parkers Guide refers to it as road tax and given that arguably a large percentage of the polpulation think its road tax and there for pays for the road, does anyone know why we pay it, where that money goes, who to and what it is used for?

Given the huge misconception and the general lack of trying to de-mistify the tax it may be one of the most misleading taxes going...

I think a large percentage of the population are stupid and like to think of things in simple terms...a tax that allows you drive on the road = road tax...

Vehicle Excise Duty - Road Tax
Unemployment Benefit - The Dole
Local Authority Taxation - Council Tax

Not really in the governments intersts to spend money on letting people know that road tax doesn't actually pay for the roads.....

like rjsterry says...it pays for nuclear men and lollipop submarines. oh and the queen gets a nice new piggy bank every year,.

dondare

"Consolidated Funds".
That is to say, all taxes that aren't the Television Licence Fee.
(Or the Comunity Charge.)
But it does get added to NI and income tax and VAT and tobacco duty and then spent on everything including Health and Defence and Education and Transport &c.

biondino

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

Aidy

biondino wrote:

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

Not really.
It's about total tax contribution.

If you live by yourself, for example, you pay 75% council tax, in a house of 4, 25% (assuming everyone pays an equal contribution).
Take a council tax of £1000, and you're paying £500 more in tax a year. (Yes, this is simplistic).

In any case, cyclists cause less damage to the roads - meaning that we cause less of a tax burden than motorists.

CiB

biondino wrote:

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

Not necessarily. You have to take the total tax take per individual for that to be valid, and we all pay different amounts of tax, from PAYE, NI, VAT on goods, fuel duty, Council tax, alcohol & cigarette duty, insurance tax, flight taxes etc. Extracting one comparitively small amount of tax paid as VED (+ fuel duty I suppose) doesn't mean that Motorist A on £17K + benefits is paying more in total to the country's infrastructure than Cyclist B on £47K.

The bigger total is what counts, except it doesn't as payment doesn't give anyone a greater right to the nations assets than a non-payer.

tgotb

biondino wrote:

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

True. Although, by the same logic, so do rich dead people :?

rjsterry

biondino wrote:

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

People who pay more tax contribute more to the roads (and everything else) so to follow the logic of the 'you don't pay road tax' brigade, rich people with big houses are more entitled to use the roads than poor people, and those on benefits shouldn't be allowed to use the roads or any other public service at all...

Of dear, I seem to be writing this stuff for them.

dondare

biondino wrote:

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

No, because higher earners pay more tax and cycle more than low earners.

http://www.timesonline.co.uk/tol/news/u ... 500754.ece

Aidy

rjsterry wrote:

biondino wrote:

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

People who pay more tax contribute more to the roads (and everything else) so to follow the logic of the 'you don't pay road tax' brigade, rich people with big houses are more entitled to use the roads than poor people, and those on benefits shouldn't be allowed to use the roads or any other public service at all...

Of dear, I seem to be writing this stuff for them.

Wait, are you saying that LiT owns the roads?

davmaggs

Roastie wrote:

I think the point is that the amount raised from VED is nowhere near enough to cover the costs of the infrastructure required for motor vehicles.

incorrect. VED (then add fuel tax) provides far more in tax than the costs. That's why motorists get so upset.

The huge surplus then gets chucked into the central pot to be wasted more effectively. The UK doesn't really hypothecate taxes.

spen666

DonDaddyD wrote:

Even Parkers Guide refers to it as road tax ....

Ahhh yes, that impeccible source of authority on the workings of the Taxation and financing of British Government

I mean the only more authoratative source of evidence is the bloke in the pub

bails87

davmaggs wrote:

Roastie wrote:

I think the point is that the amount raised from VED is nowhere near enough to cover the costs of the infrastructure required for motor vehicles.

incorrect. VED (then add fuel tax) provides far more in tax than the costs. That's why motorists get so upset.

The huge surplus then gets chucked into the central pot to be wasted more effectively. The UK doesn't really hypothecate taxes.

VED + fuel tax isn't VED.

dondare

davmaggs wrote:

Roastie wrote:

I think the point is that the amount raised from VED is nowhere near enough to cover the costs of the infrastructure required for motor vehicles.

incorrect. VED (then add fuel tax) provides far more in tax than the costs. That's why motorists get so upset.

The huge surplus then gets chucked into the central pot to be wasted more effectively. The UK doesn't really hypothecate taxes.

It's not the surplus that goes into the pot, it's all of it.

No-one is denying that motorists pay tax or that some of this is used for roads and some isn't.
However:
Cyclists also pay tax and depending on income this could be more than the average motorist pays. Some of this is used to pay for roads &c.
The roads are traditionally "Crown Estate" and our taxes don't confer ownership to us. We pay for their upkeep and we get to use them to walk, ride or drive on as we choose.
Motoring requires a licence but the licence fee is not spent directly on roads (or motorways which cyclists don't use, or cycleways which motorists don't use) nor does it mean that the licence holder has any more rights on the road than the owner of a vehicle which does not require a licence.
Unemployed people who obtain more in benefits than they pay oin tax have the same right to use those services and facilities that our taxes pay for as we do.

rjsterry

Aidy wrote:

rjsterry wrote:

biondino wrote:

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

People who pay more tax contribute more to the roads (and everything else) so to follow the logic of the 'you don't pay road tax' brigade, rich people with big houses are more entitled to use the roads than poor people, and those on benefits shouldn't be allowed to use the roads or any other public service at all...

Of dear, I seem to be writing this stuff for them.

Wait, are you saying that LiT owns the roads?

That's what she says.

lost_in_thought wrote:

I own the roads!

shouldbeinbed

I had a small chat in the pub recently with an 'I pay road tax you don't' window licker.

I've long since given up trying to explain the general taxation, emissions basis and the fact that his ton and a half of faster moving grippier metal gouges the road up far more that me and my bike ever will.

I asked how much his Tax Disc cost him - £35. I then told him the one on my car cost me £200 and therefore if he expected £35 more rights over me when I was on my bike then I wanted £165 more right over him when I was driving and that I expected him to pull over and let me past if I was behind him and for him to get out and wash my windscreen if we were stopped at the lights together.

apparently thats not the same thing at all.

Next time I'm going to telll him theres a suggestion that people like me get a special button that turns traffic lights to green as we come up to them and he's not allowed one cos he only pays minimal tax. should be good for 5 minutes of beer dripping off the ceiling :twisted:

spen666

biondino wrote:

Hang on a sec - so if VED goes into the same pot as council tax, income tax etc. then motorists DO pay more for the maintenance of the roads than cyclists (who don't won cars).

What about those motorists who have not been lucky enough to get a prize and have to buy their own car?



BTW A cyclist earning £150,000 will pay more tax that a motorist owning a Citroen C1 who earns £10,000

Aidy

shouldbeinbed wrote:

Next time I'm going to telll him theres a suggestion that people like me get a special button that turns traffic lights to green as we come up to them and he's not allowed one cos he only pays minimal tax. should be good for 5 minutes of beer dripping off the ceiling :twisted:

Nah, buttons are crazy talk. The traffic lights should be staged to let people who pay more through ahead of the others.

davmaggs

I think there's a blurring of several things.

The UK doesn't hypothecate taxes so everything goes into a central fund. However it is popular to argue for or against something based on how much it costs versus taxes sold to the public as being related to it e.g. tax on smokers often announced as a health measure

Motorists pay far more in taxes than is spent on road infrastructure. Also the money motorist pay is raised via taxes levies directly from them. In that sense and therefore in perception there is a very direct connection between the activity and the tax raising.

Therefore arguing that cyclists contribute via other taxes is irrelevent even if you stick to the hypothecation myth. Motorists already cover the cost and raise a surplus so cyclists contribute nothing.

The government charges what it can get away with. Even the carbon tax component is not related to pollution, if it were then the tax would be on fuel.

dondare

Local roads are kept up by the Council who raise the money through Council Tax not VED.

dondare

davmaggs wrote:

I think there's a blurring of several things.

The UK doesn't hypothecate taxes so everything goes into a central fund. However it is popular to argue for or against something based on how much it costs versus taxes sold to the public as being related to it e.g. tax on smokers often announced as a health measure

Motorists pay far more in taxes than is spent on road infrastructure. Also the money motorist pay is raised via taxes levies directly from them. In that sense and therefore in perception there is a very direct connection between the activity and the tax raising.

Therefore arguing that cyclists contribute via other taxes is irrelevent even if you stick to the hypothecation myth. Motorists already cover the cost and raise a surplus so cyclists contribute nothing.


The government charges what it can get away with. Even the carbon tax component is not related to pollution, if it were then the tax would be on fuel.

Alcoholics are subsidising teetotalers. Smokers are subsidising non-smokers.

davmaggs

dondare wrote:

Local roads are kept up by the Council who raise the money through Council Tax not VED.

you're still sticking to the idea of cost being related to tax. There is no link, the UK does not hypothecate taxes. Politicans justify things with a notional connection to sell the levy.

Not sure how I can make it any clearer

Plus council tax only raises about 25% of what councils need. The rest is a grant.

John Stevenson

'You don't pay road tax' types love to just add up VED and fuel taxes and whine that GovCentral spends less than that on roads, conveniently forgetting the huge externalities of driving.

Anyone have figures for the actual and monetary-equivalent cost to the taxpayer of 3000 road deaths per year, plus cost of emergency services attending crashes etc etc etc?

snailracer

John Stevenson wrote:

'You don't pay road tax' types love to just add up VED and fuel taxes and whine that GovCentral spends less than that on roads, conveniently forgetting the huge externalities of driving.

Anyone have figures for the actual and monetary-equivalent cost to the taxpayer of 3000 road deaths per year, plus cost of emergency services attending crashes etc etc etc?

Plus the cost of air/sea pollution, global warming, waging wars to "secure" oil supplies, etc. A generation of children grew up retarded because of leaded petrol, how much did that cost us?

However, all of these pale into insignificance compared to what should be charged for all those Nova-revving chavs disturbing the neighbourhood.

davmaggs

But then you are countering a false claim with a questionable one.

By example. The NHS can claim back costs from motor insurance.