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THE BRITS ARE BEING SOFTENED UP!

--with new proposed expected "pay as you drive" taxes.

the PROPOSED pay per kilometre/mile in the UK: and the FUTURE PLANS.

 The new Galileo satellite GPS system really has more to it than the UK politicians are publicising.  One of the big problems that the UK tax collectors have been facing for some years is that as fuel is very highly taxed there compared with many other EU States, heavy duty vehicles (HGVs), that is that many large commercial vehicles with a Maximum Authorised Mass or MAM (all up legally loaded weight) of many tonnes and large passenger vehicles such as long-distance tour coaches are able to deliver goods to and from the UK without having to buy diesel in the UK.   HGVs and many of these vehicles have large tanks that allow some of the vehicles to travel up to 3.000 km without refilling, so even the trucks based in the UK that travel on the Continent can fill up there and not in the UK thus saving a considerable amount of costs each year.  For information in the UK Treasury paper on the subject, go to: http://www.hm-treasury.gov.uk/media/D41/0A/lorryria240305.pdf.  Many long-distance HGVs are reported to carry as much as 1,200 litres of fuel which allows the vehicles to be refuelled on the Continent, driven in the UK before returning on anther trip.  Also, as many Continental heavy vehicles use Britains' roads without contributing to the upkeep with fuel and other taxes.   

In many Continental countries, the collection of the different taxes for HGVs etc. is eased by having extensive toll roads, but as we know here in Spain, many of the HGVs use the non-toll roads thus increasing the traffic congestion and risk of serious accidents, especially on the Costa Del Sol N340 which is not an autovia, (and these trucks are often seen travelling well over the 80 kph maximum for vehicles 3.500 kg plus MAM) so a satellite system makes sense for heavy vehicles that routinely avoid paying tolls in this way.

The losses in taxes for the UK is reported to be in the £Billions EACH YEAR.

Now we know that many of these trucks fill up at the same gasolineras, or fuel stations as we do, so pay the same costs at the pump, but what happens is that the owners claim back a portion of the tax costs called a rebate so they pay the effective legal commercial rate.  The result is that even with this rebate, the savings are far higher when they buy on the Continent so a very high percentage of the big commercial vehicles using the UK roads are not paying the high UK diesel fuel taxes and at this time, there is nothing the UK government can do about it.  It is costing the UK billions in lost taxes.  But hark!  The back room boys in Brussels are working out a solution that will solve the problem and make sure that taxes are once again paid in the UK.

 What the blazes has this got to do with Spain, you may ask?   Well, the proposal states that the answer is to change the tax rates to level the playing fields.  But as the UK taxes on commercial diesel fuel after rebates, for example, are 236% more than those of Spain in 2006 (yes, 2, 36 times those of the Spain) the rest of Europe is not going to allow their fuel taxes to be increased by anywhere near that figure, so the answer is for the taxes in the UK to be reduced to an agreed EU level by 2012.

So expect the tax to go up slightly in Spain for road fuels from probably 2010 as part of the "levelling plan" for all EU States.

 Wonderful we all cry, but a proposal also then states that the differences can be made up in the UK by charging vehicles, commercial in this case, for the mileage travelled.  Aha!  We are getting the picture now.  Well I hope you are because the document on the subject needed reading two or three times because of the way it is written for me to get the picture.   So if the UK has to have a satellite vehicle tracking system, it is a simple matter (they think) to also add all the vehicles in the UK to it to generate more income to cover the enormous cost of setting up and running the tracking system. 

And the Labour government can use “global warming” as an excuse.  

 Ah! But we are living in Spain so it will not affect us, you may think.  Governments are always looking for ways to govern, and many now seem to forget that they are the servants of the people and justify new laws in many ways.  A lot of the new laws are excellent where they work well to save us from ourselves with bad driving whether it is speeding at 200 kph plus or driving with alcohol in places there should be mostly blood, etc.  And the current campaigns about global warming, which, as I am allowed to have an opinion and with the impositions of new laws that may affect motoring in Spain/Europe, I am quite openly on the side of those who are very sceptical about the causes.  Not because the news says that it is going to get warmer, but because of the alleged causes of this “carbon smokescreen”.     But that is a subject for another day.

 The proposal contains the recommendation that the minimum levels of the tax be raised so that by 2014, the levels will be pretty equal.  So, as the commercial vehicles will have to be fitted with transponder devices (black boxes) that send out a signal to those satellites used for tracking, it will be simple (if we allow it) to insist on all vehicles to be fitted with one, at the motorist’s expense and with extra ongoing administration costs so that eventually just about everywhere in the EU it will be possible to be tracked and charged in one way or another. Even the UK licensed vehicles such as the heavy commercials.  And based on current a example, the London Congestion Tax had to soon be increased to £8 because the administration costs were not covered by the £5 tax, and that is plus 60%. It is interesting to note that Ken Livingstone insists on calling this tax a "charge" not a tax, but the foreign Embassies based in the area are not fooled and refuse to pay it as they are exempt by international laws from paying any taxes in a host country.  

Now there is a reasonable justification for the "harmonisation" of fuel taxes.  Because of the differences shown below between the taxes for different EU states, those with higher taxes are losing billions each year due to vehicles filling up in the less costly EU States, which is a logical thing to do and even family motorists who live close to a border can do this.  But a major problem also is the extra estimated costs (and pollution) of the fuel that is used by the heavy goods vehicles, etc, driving even 50 km to fill up their tanks, thus using more fuel overall than if the fuel cost as the same everywhere.

Just think, with the "black boxes" fitted to each vehicle annual distances will be checked and this could be used to also decide the cost of insurance as well as any other easy to change and collect taxes, and this is already being offered by Norwich Union in the UK as a trial with participating drivers.  The initial reports on this are that those who do not use their cars very often are paying less, but those who have to use the car for work and the annual and weekend getaways, will pay more.  As many of us will realise, this will mean that all of those eventually affected will have to budget their motoring for insurance and pay per mile then as well as for fuel, etc.  Except for those who do not pay any taxes or insurances (or have a driving licence) at all and only occasionally seem to get caught.  One effect, as is intended, is for people not to use their cars so much, but the trend for some years has been for "supermarket shopping" where a car must be used to carry the large batch of groceries unless a trip is made every day on a bus.  Of course with the Internet, it will be easier for home deliveries but I can see great moans about especially, for example, vegetables not being fresh as if selected by the buyer.

Some of us who have been living under the thought that the pay per mile will be accompanied by the elimination of fuel taxes and the annual road fund tax will note that to date, no UK government spokesman has even intimated this thought.

TABLE showing the different tax rates for commercial diesel in the EU at this time.  The comparative rates for petrol are not shown as they are generally not sold at normal (for private use) and commercial (for transport use).

Tax in Euros per 1.000 litres of commercial diesel in the EU.   The tax in the UK is 69,3 cents/litre and in Spain 29,4.

Austria

325

Cyprus

250

Denmark

404

Finland

319

Hungary

339

Lithuania

245

Malta

332

Portugal

339

Slovenia

303

Belgium

305

Czech Republic

336

Estonia

245

France

392

Ireland

368

Luxembourg

278

Netherlands

365

Romania

260

Slovakia

373

Bulgaria

220

Germany

470

Spain

294

Greece

260

Italy

403

Latvia

236

Poland

303

Sweden

394

United Kingdom

693

Readers will note that the tax cost in the UK is 2,36 times that in Spain, and the table below gives the differences in cost between commercial and private tax rates in four countries according to the EU report.  The differences are minimal.  But the UK tax as a proportion shown in the table would be, using Spain's tax, €712 or €19 more per 1.000 litres.  No wonder fuel is so expensive in the UK.

Commercial diesel

Non-commercial diesel

Belgium

305 €

327 €

France

392 €

417 €

Italy

403 €

413 €

Spain

294 €

302 €

The EU page is at:  (Cut and paste address) http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/99&format=HTML&aged=0&language=EN&guiLanguage=en

Be safe and TRUST NOBODY.

UPDATE ON GALILEO June 2007

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