Spare a thought for the British motorist - Part 1 - oppressive taxation
UPDATED: I’ve had to update all the figures in this post, because in the few months since I wrote it, petrol has risen by 10 pence per litre. Unbelievable.
Why is the UK government intent on killing off the car? Not satisfied with chucking our industry to the dogs, the senior governmental bean counters have turned their attention to the softest target of all - the motorist. Consider if you will, the tax implications of driving in this country…
Let’s imagine that you’re heading out to buy a new car. Remember of course that your income has been heavily taxed at 22% or 40%, depending how much you earn, plus you’ve payed your National Insurance. Then of course your local council has probably robbed somewhere in the region of £1,200 ($2,346) per year off you as well. You’ve been saving up for your new motor, and earning interest on that money. Of course, the government has taken a cut of your interest in tax too. So, as you walk into the car dealership, you have already suffered a heavy burden of taxation.
You are going to buy a Volkswagen Golf 1.6S FSi 3 door - UK price: £13,357 ($27,437). Try and forget the fact that this car is sold cheaper in virtually every other country. Now, you’ve just paid VAT on that amount at 17.5% (any Americans reading this page may be surprised to learn that we pay 17.5% sales tax on just about everything here) - so that’s another £1,989 ($4,085) heading off to the government. You’d think they might be happy with that fat wedge of cash… hardly. It’s going to cost you another £643 ($1,321) in registration fees and first year road tax before you can get that baby on the road. And this is just the beginning of a long cycle of Gordon Brown and co. systematically robbing you at every given opportunity.
Insurance
Every car has to be insured, and the price you pay will vary greatly depending on your personal details, but one thing is always sure: the government will take its Insurance Premium Tax (IPT). Unbelievable. Currently the rate for car insurance is 5% - the government has quietly doubled this rate since its inception less than 10 years ago. It was originally 2.5%. Did you notice? Probably not. So assuming an average premium of £500 per year, you’ve just been robbed of another £23.81 ($48.91).
Road Tax
Every UK car owner has to pay this, and the amount paid is based on the emissions of the vehicle. The government calls this “Road Fund Licence”. Heaven forbid they should call it what it is: TAX. The British public are so stupid they do get sucked in by these naming subtleties. On our Golf, the tax will be £125 ($257) per year. Because the car is registered after March 2006 it gets this special rate. My Fiat, which has comparable emissions, does not benefit from this tax break because it was registered before March 2006 and I have to pay £175 ($359) per year. How else does the greedy government take your cash?
MoT
Each car over 3 years old in the UK (so our Golf won’t be due for this just yet), has to undergo a safety inspection called an MoT (Ministry of Transport) test. This currently costs £50.35 ($103.39) for a normal passenger car. When I started driving, around 11 years ago, this fee was less than £30. That’s some increase. Well above inflation.
VAT
The dreaded 17.5% sales tax rears its ugly head again every time you service your car. You pay it not only on the parts, but also on the labour. You also pay it on car park tickets, and every accessory you buy.
Petrol
Heres the biggest irritation of all. 11 years ago when I started driving, petrol cost 47.5p ($0.975) per litre. Now, the British public pays around £1.04 per litre. Let me convert this into dollars per gallon for all you American readers - get ready to pick yourself up off the floor…
There are 3.7854118 litres in a US gallon, which means we pay £3.94 per gallon. At today’s exchange rate of 2.05 dollars to the pound, this means the British driver pays $8.09 per gallon! Still feel like complaining about your US petrol prices?
Of this amount, almost three quarters goes straight back to the government.
Congestion Charging
As if the driving public weren’t being raped enough, if you want to drive into the centre of London, you will have to pay £8 ($16.43) each day. That’s before you find a car park, which in the centre of London can be anything up to £40 per day.
The Future
Well, it looks bleak. The government is now discussing the possibility of charging everyone for each mile they drive, which will involve fitting GPS tracking to your vehicle so they can as a nice by-product spy on your every move. The public will be so absorbed with arguing the price scheme, they will completely overlook the insidious infringement of their civil liabilities. It’s the usual smoke and mirrors tactics. They will have you believe that road pricing will make things cheaper - it may well do, for the tiny minority. The vast majority of people will suffer. It won’t be recreational drivers that suffer either, they after all have a choice of whether to go for a drive or not. No, the real burden will be borne by professionals who have no choice but to use their cars for business. Their increased costs will have to be passed on, which means prices in general will rise. It’s a vicious cycle.
Conclusion
The financial burdens associated with driving a car in the UK are enormous. It’s small wonder that people are having to work more. Many economists say that this is because people want to spend more, but the majority of spending that goes on is done on credit, so where have all the extra wages gone? Straight to the treasury is the simple answer. There’s a lot more to say on this matter because financial burdens are not the only thing that should be troubling the British motorist, something far more sinister is taking place under the banner of “road safety”. Part 2 coming soon…